Toshiba investigated by Japan's securities watchdog: Nikkei

TOKYO (Reuters) – Japan’s securities watchdog is investigating Toshiba Corp’s accounting practices for the last business year to see if it properly handled the losses incurred by its U.S. nuclear unit Westinghouse, the Nikkei business daily reported on Thursday.

The Securities and Exchange Surveillance Commission is examining the process of how Toshiba created the financial report for the 2016/17 business year, which was released in August, the Nikkei said.

The report was originally due at the end of June but Toshiba and its auditor had a conflict of opinion over when the Japanese company came to know about the losses at Westinghouse, the Nikkei said.

The auditor, PriceWaterhouseCoopers Aarata LLC, in August gave a “qualified opinion” on Toshiba’s financial results, meaning it broadly vouched for books that contained minor problems.

But in a rare move, it also issued a separate “adverse opinion” on corporate governance, saying Toshiba was late in booking Westinghouse losses.

The securities watchdog will examine exchanges between Toshiba and its auditor and aims to see what led to the auditor’s decision, and why reports from previous years were postponed repeatedly, the Nikkei reported.

The investigation was not due to any new discoveries or allegations, according to the Nikkei.

A Toshiba spokesman declined to comment on the report.

Reporting by Kaori Kaneko; Editing by Chris Gallagher and Edwina Gibbs


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How Baidu Plans to Win the Artificial Intelligence Market

The Chinese company is leaning on its strengths.

LAGUNA BEACH, Calif.—Baidu, the Chinese Internet giant, is betting big on artificial intelligence.

Investors love it—the company’s shares kicked off 2017 trading at $ 168 and are now at an astounding $ 270. (And expected to keep climbing past $ 300.)

Why the sunny outlook? Because AI is widely seen as a market with massive potential—and Baidu, at its heart a research company, has the culture and mindset to succeed, co-founder and CEO Robin Li said at the Wall Street Journal’s D.Live conference in Laguna Beach.

“Every company has its own DNA,” said Li, one of the wealthiest people in China. “Baidu is a technology company.”

That mindset worked well in the desktop age, allowing Baidu to rise to dominance in search in its native country.

It has worked less well in the mobile age, Li said. “For mobile you need to enable people to create content for you,” he said, and the so-called walled garden approach by tech’s dominant platform companies—Apple, Google, etc.—halted Baidu’s access to it. The company faced challenges there, Li said.

But things are rapidly changing. “We have entered a new age, the age of AI, and technology is important again,” Li said. “You need the best language processing tech, the best image recognition tech, the best data analysis…we are good at that.”

Baidu invests 15% of revenue in research and development, Li said—about 10 billion renminbi, or about $ 1.5 billion U.S., “probably the highest among Chinese tech companies” and among the highest for global tech companies. “All of that is AI related, if you think search is an AI problem,” he said. “And it is.”

And that’s why Li is feeling positive about Baidu’s place in the AI era to come—and why investors do, too.

“We have strong technology,” he said. “Search is tech-centric and AI is very tech-centric.”


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