Month: September 2015

Toshiba CEO resigns over $1.2bn accounting scandal

Toshiba CEO Hisao Tanaka has resigned after an independent investigation showed he knew about overstated corporate profits for seven years. The accounting irregularities of $1.22 billion involved top management.

After resigning, Tanaka said he would be temporarily replaced by Chairman Masashi Muromachi. Toshiba is considering appointing outside directors to over half of its board seats, he added.

The other executives and board members who stepped down are vice-presidents Hidejiro Shimomitsu, Masahiko Fukakushi, Kiyoshi Kobayashi and Toshio Masaki, and Keizo Maeda the representative executive officer.

“I see this as the most damaging event for our brand in the company’s 140-year history,” Tanaka said after the news conference where he announced he was stepping down.

On Monday, it was reported that Toshiba will have to adjust its financial statement in which the operating profit of the corporation for 2009-2014 was overstated by nearly 152 billion yen (more than $1.2 billion). Over the seven years Toshiba employees, under pressure from top managers, overstated the company’s performance, which led to a distortion of the financial statements. The overstatement was roughly triple Toshiba’s initial estimate of about 55 billion yen.

The reasons for the overstating were the company’s deteriorated earnings due to the global financial crisis, the 2011 earthquake off the Pacific coast of Tohoku and the Fukushima meltdown.

 

See full content here – https://www.rt.com/business/310351-toshiba-ceo-accounting-scandal/