Toshiba taps ex-top ex­ecs of ma­jor firms as out­side di­rec­tors

The China Post - - BUSINESS INDEX & -

Cri­sis-hit Toshiba said Tues­day it will book a net loss for the last fis­cal year, as it scram­bles to re­vise its fi­nan­cial records to ac­count for a bil­lion-U.S.-dol­lar ac­count­ing scan­dal.

The com­pany also an­nounced that it would ap­point a host of renowned Ja­panese busi­ness peo­ple as out­side di­rec­tors in a man­age­ment over­haul to im­prove its cor­po­rate cul­ture, in which high-handed bosses rou­tinely pres­sured their sub­or­di­nates to in­flate prof­its.

Toshiba said it ex­pected to log a net loss for fis­cal 2014, which ended March this year, al- though it was not able to pro­vide an ex­act fig­ure.

The com­pany also said it ex­pected to re­port an­nual sales of 6.66 tril­lion yen (US$54 bil­lion) and an op­er­at­ing profit of 170 bil­lion yen for that year.

In a bid to beef up its cor­po­rate gov­er­nance, the com­pany also an­nounced it would ex­pand the num­ber of out­side di­rec­tors from four to seven, in­clud­ing a for­mer supreme court jus­tice along with a num­ber of well-known busi­ness lead­ers from other ma­jor firms.

The vast 140-year-old con­glom­er­ate has been ham­mered by rev­e­la­tions that top ex­ecu- tives pres­sured un­der­lings to sys­tem­at­i­cally in­flate prof­its by about US$1.2 bil­lion since the 2008 global fi­nan­cial cri­sis.

One of the most dam­ag­ing ac­count­ing scan­dals to hit Ja­pan in re­cent years, the case prompted an in­cum­bent pres­i­dent and seven other top ex­ec­u­tives to re­sign last month af­ter a com­pany-hired panel found top man­age­ment com­plicit in a years-long scheme to pad prof­its.

Toshiba will hold an ex­tra­or­di­nary share­hold­ers meet­ing in Septem­ber to dis­cuss the new board mem­bers as well as its plans to im­prove its cor­po­rate cul­ture.

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