Toshiba unit purchase worth $6.5 billion by Canon being probed by regulator

Japan’s anti-monopoly regulator is investigating Canon Inc over a possible breach of disclosure rules in the company’s acquisition of Toshiba Corp’s medical equipment unit, a source with direct knowledge of the matter said. Canon, which agreed in mid-March to buy Toshiba Medical for 665.5 billion yen ($6.5 billion), declined to comment on the matter.

The source declined to be identified as he was not authorised to speak to the media. Toshiba, in a hurry to raise cash before closing its books for the business year that ended in March, structured the sale of its medical equipment business to Canon in an unorthodox way so that it could book proceeds before the deal was approved by regulators.

At the time some antitrust and accounting experts said the deal structure was questionable, though they acknowledged it probably did not breach any regulations. A Toshiba spokesman said on Thursday that the company had consulted with experts on the deal and that it saw no problem in the sale process of the medical unit from a legal perspective. This development comes after Toshiba Corp said it would more than halve its capital base – a move that comes in the wake of a $1.3 billion accounting scandal last year.

Reuters