Toshiba CEO resigns over accounting scandal

Toshiba CEO resigns over accounting scandal

Business news |
By eeNews Europe

The committee reported back to Toshiba on Monday that the company had overstated its operating profits by 151.8 billion yen (about $1.22 billion) cumulatively over the period covered by the fiscal years 2008 to 2014.

Toshiba as a vertically integrated conglomerate makes semiconductor components, personal computers, televisions and up to nuclear power plant. The mis-stating of accounts appears to have been born of managerial pressure placed on operating companies and affects the PC, visual products and semiconductor business units.

The company has apologized repeatedly to shareholders, customers, business partners and others affected by the scandal. "Going forward, we will renew our commitment to our original management policy, which puts the highest priority on human life, safety and compliance," the company said in a statement. The company also said it would examine measures to prevent such events happening again and implement them thoroughly.

On Tuesday, as expected, company CEO Hisao Tanaka, resigned along with his predecessor in the CEO role vice chairman Norio Sasaki. Tanaka will be replaced temporarily with effect from Wednesday July 22 by Toshiba chairman Masashi Muromachi, according to reports.

More than half of the directors of the company could be forced to quit so that outside directors could be appointed, to try and effect a culture change within Toshiba the same reports said.

The scandal is likely to lead to restatements of accounts, and possible fines and is the worst board-room scandal since it was discovered in 2011 that optical specialist Olympus Corp. had hidden $1.7 billions of losses and other dubious fees and payments in a cover-up that dated back to the late 1980s.

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