Toshiba CEO, 8 Others, Resign Over $1.2 Billion Accounting Cover-Up

The BBC reports that Toshiba president and chief executive Hisao Tanaka, along with vice-chairman Norio Sasaki, former chief executive Atsutoshi Niched, and six other executives, has resigned from the company in the wake of an accounting scandal: On Monday, an independent panel appointed by Toshiba said the firm had overstated its operating profit by a total of 151.8bn yen ($1.22bn, £780m). The overstatement was roughly triple an initial estimate by Toshiba. Asia Times has an article that delves into the pressure which drove Tanaka and others to misstate their revenue figures so drastically. From that piece: Top management and the heads of in-house companies acted on “the shared goal of padding nominal profits,” the report said. President Hisao Tanaka and immediate predecessor Norio Sasaki, now vice chairman, denied intentionally delaying loss-booking, but those who worked below them thought they were being instructed to do so, according to the report. Top management would assign “challenges,” or earnings improvement targets, at monthly meetings with the heads of in-house companies and subsidiaries. These targets were especially aggressive in fiscal 2011 and fiscal 2012, when Sasaki was president. In-house company chiefs felt enormous pressure to meet the goals, the committee concluded. After the announcement of Tanaka's resignation, the company's stock actually rose six percent. CNBC explains: Getting the bad news out appears to have eased investors' concerns about the stock. "The total problem has been quantified and there's a likely chance the CEO will have to quit. That's been seen as the end of that," said Amir Anvarzadeh, director of Japan equity sales at BGC Securities.

Comments

1.2 Billion

[MozeeToby]

Remember folks. When you lie, cheat, and steal for 1.2 billion dollars, we will talk about all the pressures you are under and force you to resign in disgrace. If you rob $100 from the cash register at quickie-mart when the cashier isn't looking, we'll talk about how you're the scourge of society and put you away for 20 years.