Foreign Investors Sue Toshiba Over Accounting Scandal (reuters.com)

A group of investors, mostly foreign institutions, are suing Toshiba in a Tokyo court for 16.7 billion yen ($162.3 million) in damages, over a $1.3 billion accounting scandal uncovered last year. Reuters adds: Toshiba said in a statement on Thursday that the 45 unnamed shareholders were seeking compensation for damages caused by its "inappropriate accounting". It will take an unspecified provision to cover any eventual payout, Toshiba said. The laptops-to-nuclear conglomerate has been sued by 15 groups and individuals since it first admitted to reporting inflated profits going back to 2008, including Japan's public pension fund. GPIF, the world's biggest pension fund, has been shifting into shares to attempt to boost returns. Thursday's case, however, is the largest - the remaining suits are seeking a combined 15.3 billion yen in compensation. Toshiba is still overcoming the reputational and share price hit of an investigation last year that found widespread accounting errors throughout its sprawling business, blaming a corporate culture in which employees found it difficult to question their superiors.

Comments

Re:Dennis Ritchie found dead

[Big Hairy Ian]

I've heard of people being in a different time zone but that's 5 years out https://en.wikipedia.org/wiki/...

Impossible

[110010001000]

This is impossible. The Japanese "honor/Bushido that is so ingrained in their culture would make this an impossibility. Truthfulness is a major pillar of Bushido. What a fucking joke.

Re:Impossible

[The Grim Reefer]

This is impossible. The Japanese "honor/Bushido that is so ingrained in their culture would make this an impossibility. Truthfulness is a major pillar of Bushido. What a fucking joke.

The Government of Meiji tried to eliminate all of that samurai stuff in the 1870's starting with the Haitorei Edict. Is it any surprise that 140 years later honor isn't valued like it once was. They wanted to westernize Japan, this appears to be another step in that direction.

In other words, it's a bunch of Bullshido.

Re:Impossible

[hcs_$reboot]

Well, you might be used to that kind of scandals in Japan, after Fukushima, Olympus, Mitsubishi trucks, Yamaichi sec, Livedoor.....

Vaguely familiar

[rmdingler]

"... a culture in which emoyees found it difficult to question their superiors."

At least we know that the Far East isn't so different after all.

.. dificult to question superiors

[Anonymous Coward]

I.e. asian worker-drone culture

Logical oxymoron, unless you are a lawyer

[Trachman]

Shareholder suing own property is just stupid. Lawsuits will cause the company to spend millions of dollars for lawyer fees and the only winner will be the third party - the lawyers. Both the company and shareholders will be poorer as an outcome of the controversy.

As such, suing the management of the company where you own some stocks is only useful if you are a lawyer (or a litigation industry).

Re:Logical oxymoron, unless you are a lawyer

[Coisiche]

I think the clue is in the summary where it says the shareholders are "mostly foreign institutions", i.e. corporations. For a corporation quarterly figures seem to be more important then long term considerations. Once the lawsuit payout has boosted one quarter's income and secured an executive bonus then it won't matter if the dividends or share value are reduced. Someone else's problem.

Re:Logical oxymoron, unless you are a lawyer

[Anonymous Coward]

It makes sense to sue while they have standing as shareholders, buy more shares when the civilian shareholders sell, and then have a stronger grip on the company in the future. Even if it costs a bit on the balance sheet next year.

Alternately, if they expect this to kill Toshiba, sue as shareholders to get some value that way, watch the civilian shareholders sell, and prepare to buy up useful departments during the bankruptcy proceedings. If successful, this leads to a long-term gain at a medium-term loss.

While I know there are plenty of stories about CEOs and other upper management making stupid decisions based on slight short-term profits, that does not mean that every decision is short-term and foolish. Some plan ahead, but no one can plan a contingency for everything that might happen. Except Batman.

How does suing the company make sense?

[GreyWanderingRogue]

Aren't all of the shareholders harmed by the misrepresentation (barring insider trading)? So shouldn't all of the shareholders by entitled to any settlement/compensation. And since the money is coming from the company, they're all just paying themselves, right? If they already sold their investment, why should the people who didn't sell have to pay twice (they already lost the same value as those who sold). It seems like the only logical target of a suit would be the actual people who are responsible for the accounting scandal, not the overall company itself. (Or possibly anyone who sold before the accounting scandal came to light, but, again, those people are not Toshiba.)

Re:How does suing the company make sense?

[swb]

Peter, Paul, Mary, Beth, Steve and Saul are all shareholders of a corporation. The management of the corporation does something wrong, causing financial losses for the corporation and the stock price declines as a result of the losses.

Saul is a wealthy shareholder and the only one who can afford to sue the corporation for his losses. His suit is successful, and he obtains a settlement of $12 (just making the math easier for me), or $2 per shareholder.

His shareholder liability is just $2, so he nets an additional $10 which is effectively a reduction in value for the other five shareholders. They are in effect paying the damages.

They may all be equally entitled to damages, but only one shareholder has the resources to go after them. I'd guess in real life, "Saul" has already sold his shares and realized the loss, so any settlement isn't really coming from him as he has already sold his shares.

And I'd guess that a shareholder suit like this is about as cynical as it sounds -- a race to the bank to be the first to grab value and to outmuscle shareholders who cannot themselves muster a lawsuit on their own.

Re:Dennis Ritchie found dead

[hcs_$reboot]

That's definitely not a Frist post

Interesting outcome

[hcs_$reboot]

It will be very interesting to see the outcome of a lawsuit seeking billions yens, mainly arranged by foreign institutions, targeting a big Japanese corporation in a Japanese courtroom.

Re:Dennis Ritchie found dead

[Dishevel]

You do not get to Hijack other stories because of what you want. You are not three years old. Stop acting like one.
You are a bad human being.

Re:Dennis Ritchie found dead

[clonehappy]

Something's going on with these bots lately. They're posting coherent, intelligent, well thought out replies that just flatly have nothing to do with the original post or are just blatantly incorrect, or information like this (correct, but not news) but wants to sound so concerning. It's really strange. Like this "news" is almost exactly 5 years old to the day.

I wonder if it's some kind of code that's being hidden in plain view or something?

Re:Dennis Ritchie found dead

[Big Hairy Ian]

Something's going on with these bots lately. They're posting coherent, intelligent, well thought out replies

They merely look coherent compared to the bots that are doing OPs these days