TSE Decides to Keep Toshiba Listed for Now

Tokyo, Oct. 11 (Jiji Press)--The Tokyo Stock Exchange said Wednesday that it will end the designation of Toshiba Corp. <6502> as a "security on alert" on Thursday, allowing the troubled electronics and machinery giant to remain listed for the time being. The TSE said that after examining the company's measures to prevent accounting irregularities and interviewing executives, it recognized that Toshiba's internal management system "has reasonably improved." Following the TSE decision, Toshiba issued a statement vowing to further improve its internal controls and make every effort to restore trust in the company. Under TSE rules, Toshiba will still be delisted from Japan's biggest stock exchange unless it averts two straight years of negative net worth, at the end of fiscal 2017 next March. The company aims to resolve its negative net worth, which totaled 552.9 billion yen at the end of March this year, by using proceeds from the planned sale of subsidiary Toshiba Memory Corp to a Japanese-U.S.-South Korean consortium led by U.S. private equity firm Bain Capital. The TSE designated Toshiba as a security on alert in September 2015, following the revelation earlier that year of Toshiba's accounting fraud. Japan Exchange Regulation, the self-regulatory body under Japan Exchange Group Inc. <8697>, worked to determine whether Toshiba should be removed from the TSE. The body found that Toshiba had improved procedures to appoint and dismiss its directors, with a view to preventing autocratic management, and reformed its decision-making system to strengthen the independence of the finance division. "The end of the designation does not mean that the possibility of Toshiba's delisting has been eliminated," Japan Exchange Regulation President Takafumi Sato told a press conference. END