Accounting flaws nail top brass at Toshiba

TOSHIBA’S chief executive Hisao Tanaka would step down in September along with other board members, including vicechairman Norio Sasaki to take responsibility for accounting irregularities, sources familiar with the matter said yesterday.

The Japanese conglomerate has hired a third-party committee to investigate past bookkeeping practices, which sources said led to profits being overstated by more than ¥170 billion (R15bn). That is more than triple Toshiba’s initial estimate of roughly ¥50bn.

Other sources with knowledge of the probe have said investigators were looking into the role that top officials played in the irregularities, focusing on whether they had knowingly encouraged malfeasance. The committee is expected to release its findings next week.

The scandal is a reminder Japan Inc is still in the early stages of a campaign backed by Prime Minister Shinzo Abe to improve corporate governance.

Toshiba’s shares have fallen roughly 27 percent in Tokyo since April when the firm first disclosed irregularities in its books.

The independent committee was likely to say Toshiba needs a governance overhaul and more than half of its board could be replaced at the next shareholders’ meeting in September, sources said yesterday. The sources declined to be identified because they were not authorised to speak with media.

A Toshiba spokeswoman said the company had not yet made any decision on the matter and was waiting for the third-party committee to release its findings.

The laptops-to-nuclear conglomerate first disclosed accounting irregularities in early April, two months after financial regulators ordered a report on past bookkeeping.

It has been unable to close its books for the past financial year, in the meantime, and suspended its year-end dividend payout. – Reuters