Toshiba officials quit over inflated profits scandal
Print Edition
THE president of Toshiba and seven other executives resigned yesterday over a US$1.2 billion accounting scandal blamed on their overzealous pursuit of profit.
Hisao Tanaka and Vice Chairman Norio Sasaki, a former president, were the most senior figures to step down after an independent report found top management complicit in a years-long scheme to pad profits.
In a stinging indictment, the report by a company-hired panel said managers were involved in “systematically” inflating profits over several years.
“There has been inappropriate accounting going on for a long time, and we deeply apologize for causing this serious trouble for shareholders and other stakeholders,” a company statement said.
At a packed press briefing, Tanaka offered a “heartfelt apology” as he bowed deeply in a show of contrition.
“This is the worst damage for our brand in its 140-year history,” he said.
But the 64-year-old company veteran denied ordering staff to doctor Toshiba’s books.
“I didn’t order inappropriate accounting,” he said.
Sasaki, 66, served as Toshiba president between June 2009 and June 2013, covering most of the period during which profits were inflated. He did not appear before the media yesterday.
The findings come less than two months after Japan adopted a long-awaited corporate governance code aimed at improving firms’ transparency.
Toshiba’s accounting scandal began when securities regulators uncovered problems as they probed its balance sheet earlier this year.
The Toshiba panel, headed by a former Tokyo prosecutor, described a corporate culture where underlings could not challenge powerful bosses who were intent on boosting profits at almost any cost.
“Inappropriate accounting was systematically carried out as a result of management decisions ... betraying the trust of many stakeholders,” it said.
“Toshiba had a corporate culture in which management decisions could not be challenged.”
The panel said: “In some cases top management and division leaders appeared to have shared a common objective to inflate profits.”
The findings drew a rebuke from Japan’s Finance Minister Taro Aso, who warned that it “could damage the credibility of the Japanese market.”
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