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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.
resign?
They should learn from my country's statespeople: NEVER RESIGN!!!
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
What, no trial and jail?
I'm sensitive to this kind of corporate nonsense because one of the best career chances I ever had was blown because of executive malfeasance.
Back in 1999, I applied for and was offered a job with UUNET as a UNIX engineer. Great job, smart, fun colleagues. Enter Worldcom and their purchase of us. Everything went south after a few years. Bernie and Scott went off to jail, everyone lost their 401Ks, massive charlie foxtrot. MCI buys us out of bankruptcy, CEO decides to scale down employee numbers. We watched in horror as the man with the cardboard boxes would cruise through your wing of the building and place a cardboard box for your stuff in your cube. Tag! You're gone. I watched so many really talented engineers do the walk of shame. After a couple of years of this, we were bought by Verizon Business. More rounds of layoffs. More good talent flushed so the CEO could look good before the shareholders. I fled at this point and found greener pastures. I probably learned more in these few years than in any other period of my IT career.
That kind of accounting would not be scandalous here, and likely result in huge bonuses instead. I see great futures for them on Wall Street or with any of a number of legal or accounting firms.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Isn't this traditionally the kind of event where any Japanese man with any amount of self-respect commits Hara-Kiri instead of pointing fingers at each other?
Just wondering.
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.
they made the planes the bombed pearl harbor and got a away with it this just bad book keeping.
How much of this was due to weakness in the PC market? Declining shipments have hurt the industry as a whole, and I imagine Toshiba is largely dependent on sales of laptops. Someone I spoke to suggested they didn't believe Lenovo's numbers for the past couple years. Anyone have any knowledge or insight into Toshiba's financials? I'm wondering if this is more than greedy executive leadership, maybe more a canary in the coal mine for the industry as a whole.
Not read the report in enough detail and I'm not a financials guy.
But GE, Microsoft, any number of companies in the 90s and early 2000s engaged in 'backing in' -- tweaking their earnings to meet expectations by borrowing from the next quarter; that is, delaying the reporting of losses.
How much of what Toshiba is doing is worse than that?
Lie the equivalent of $1,200 and you go to prison, lie about $1,200,000,000 and you get to resign with your golden parachute. It's all about scale.
You are just not going to outdo the Americans. And resign? Please! Here you get promoted, might even become president of the country, and the job will be waiting for you when you finish your term/sentence..
“He’s not deformed, he’s just drunk!”
GE had a long history of "managed earnings", where quarterly earnings would magically beat the targets by a few percent. They were finally busted by the SEC in 2009, but the practice is known to have gone on much earlier, when Jack Welch was running the company.
This just happened at Olympus a few years ago. They're still mad that some non-Japanese guy told the public their accounting numbers were bogus. Kicked his ass out of the country.
is basically just massive scale tax avoidance procured by hiring ex ministers who work for big accountancy firms.
these people should be imprisoned for life and all their assets impounded but instead they just resign and get lucrative consultancies do the same thing elsewhere
[site]
One need only recall Kurosawa's "The Bad Sleep Well" (1960) to note that nothing really has changed.
Well, this is why investing is so risky. You really do not know as a typical investor what is happening within a company. I think this goes on more then we know about. Just because so many times I see earnings reports and think this is out of skew with what is occurring in reality.
this?
Best Slashdot Co
My company had been talking to them about buying several thousand tablets running Android, on to which we would load a custom application. When we went back last year to talk seriously about the terms, they revealed they had signed some deal with Microsoft, to sell only Windows tablets. At the last minute they offered up some half hearted Android solution, but it was too late. I speculate they were unhappy with the thin tablet profit margins, and trying to justify charging premium prices by advertising MS features as premium. The irony is, this is the second company I have worked for that decided to spend the money and effort to move away from a Windows or CE OS, to an Android OS.
No argument there, but that's fraud not embezzlement.
Nothing wrong with deferring losses to next year. Viz. You get your American tax refund a year after you've paid your taxes.
Hey, if it's good for the government...
I don't think you do go to prison for claiming to have made $1200 more than you really did. At least not typically.
As an American, did they get the money back?
These 8 should be bankrupt and living on the street.
Take the money! That would do more to stop this, than shooting an old man.
Same as always.... Kill someone and you`re a killer.... kill 100000 and you`re a conqueror...
I can't call that English
I really don't know where Japan is heading. Although it has little foreign debt the government is heavily in monetary debt to the people. The future is bleak.
Not resignment, retirement.
Niched is not a Japanese name. His name is Atsutoshi Nishida.