As reported by Reuters, the Tokyo, Japan-based conglomerate is being scrutinized over losses incurred by Westinghouse, Toshiba's nuclear power unit which has cost the company billions of dollars.
According to sources familiar with the matter, the Japanese Securities and Exchange Surveillance Commission is examining whether the process involved in creating Toshiba's financial report for the 2016-2017 financial year is completely legitimate and justifiable.
Westinghouse Electric was acquired by Toshiba in 2006. Originally valued at $5.4 billion, the unit was intended to give Toshiba a lift into the potentially lucrative nuclear power market, with the firm claiming the buyout would "herald the dawn of a new era for nuclear energy."
Toshiba set its new acquisition to work, but it did not go as planned.
With two nuclear power projects well underway -- but facing serious delays -- Westinghouse became a financial burden of such proportion that the subsidiary eventually filed for bankruptcy protection, leading to a $6.3 billion write-down for Toshiba and financial loss for the second year in a row.
The Japanese firm now expects a net loss of 390 billion yen for the fiscal year ending in March 2017, as well as an operating loss of 410 billion yen, despite a predicted uptake in sales.
Toshiba has already faced a restructuring effort which involved the sale of its PC business, the loss of thousands of employees, and the sale of its prized memory business.
With shareholder value being wiped due to Toshiba's precarious financial position, an investigation into Westinghouse is likely to be the last thing the company wants to tackle.
In September, Toshiba formally announced the sale of its memory chip business to a Bain-led consortium of investors for two trillion yen.
ZDNet has reached out to Toshiba and will update the story if we hear back.