Date
16 December 2017
Hisao Tanaka announces his resignation to take responsibility for the inflation of earnings at Toshiba under his watch. Photo: Bloomberg
Hisao Tanaka announces his resignation to take responsibility for the inflation of earnings at Toshiba under his watch. Photo: Bloomberg

Top Toshiba execs quit amid US$1.2 bln accounting scandal

Toshiba Corp. president and chief executive Hisao Tanaka and his two predecessors quit after investigators found that the Japanese conglomerate inflated earnings by at least US$1.2 billion since the global financial crisis.

Along with Tanaka, vice chairman Norio Sasaki and adviser Atsutoshi Nishida resigned to take responsibility for accounting irregularities that occurred under their watch, Bloomberg reported Wednesday.

The Tokyo-based firm said Tuesday it will correct earnings by at least 152 billion yen (US$1.23 billion), based on the results of an independent investigation of its books stretching back about six years.

“For the company to rebuild, there needs to be a renewal of the management structure,” Tanaka, a 42-year veteran, said during a briefing in which he, chairman Masashi Muromachi and vice president Keizo Maeda all bowed in apology.

Muromachi will take over as interim president, and Toshiba will announce a new management team in mid-August.

The resignations come after a report showed that top executives set unrealistic profit targets that systematically led to flawed accounting.

The accounting irregularities were “skillfully” hidden from outside observers, the probe found.

Toshiba, a 140-year-old pillar of Japan Inc., is caught up in the country’s biggest accounting scandal since 2011.

Tanaka and Sasaki, who between them have led the company for the past six years, sought to delay booking losses, and employees were unable to go against management orders, the report said.

No charges have been filed against Toshiba or its executives in the case.

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