Toshiba bosses resign over billion euro scandal

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Flickr, Eric G.

TOSHIBA’s chief executive has resigned from his position following a billion euro financial scandal in which the electronics firm overstated its profits. Hisao Tanaka has left his position, as will vice chairman of the company, Norio Sasaki.
The resignations follow criticism from Japanese politicians, who say the scandal will undermine international investors’ faith in business practices in the country.
Over a period of several years, Toshiba exaggerated its profits to the tune of 152 billion yen (more than €1.1 billion). The two former chiefs knew of the manipulation, and are reported to have created a culture in the company where managers were pressured to lie about financial targets.
A similar scandal rocked another Japanese tech giant, Olympus, when it was discovered that the company had obscured €1.5 billion losses over a 13-year period. The irregularities emerged when a new British CEO raised concerns and was promptly fired. The ensuing corruption scandal wiped up to 80 per cent of the corporation’s share price.
Regarding the Toshiba resignations, Japanese finance minister, Taro Aso, said: “If [Japan] fails to implement appropriate corporate governance, it could lose the market’s trust. It’s very regrettable.”

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