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July 21, 2015

Toshiba scandal hits the top as CEO resigns

Accounting scandal has resulted in Hisao Tanaka and Norio Sasaki resignations.

By James Nunns

Toshiba’s CEO Hisao Tanaka is to resign as a result of the accounting scandal that has hit the company.

Tanaka is joined in his resignation by vice-chairman Norio Sasaki, following the news that the company had overstated financial results for the past six years.

The scale of the overstatement was revealed on Monday, as an independent panel appointed by the company found it had invented profit by a total of 151.8bn yen, (£780 million).

The company said in a statement on its website: "Toshiba Corporation expresses sincere apologies to our shareholders, customers, business partners and all other stakeholders for any concern or inconvenience caused by the investigation into the appropriateness of its accounting."

"We received the investigation report from the Independent Investigation Committee on July 20, 2015. The Company takes the content of the report by the Independent Investigation Committee very seriously. We reiterate our deep apology to our shareholders, investors and all other stakeholders."

The company will be required to restate its profits for the period between April 2008 and March 2014 and it could be faced with hefty fines.

While shares in the company rose 6% on the Nikkei, they are still down around 23% since Toshiba first disclosed cases of accounting irregularities in April.

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The company looking forward has said that it will renew the commitment to its original management policy, which: "Puts the highest priority on human life, safety and compliance, and reorganize our corporate governance structure and internal control system."

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