TOKYO, Jul 21: The president of Japan’s Toshiba, along with seven high-ranking executives and directors of the company has resigned his post over an accounting scandal amounting to USD 1.2 billion.
Hisao Tanaka and his deputy, Norio Sasaki, stepped down on Tuesday, after an independent investigation report found that senior managers of the company were complicit in a profit padding scheme, which has been apparently going on for years reported.
The report, prepared by a panel hired by the company, said managers were involved in “systematically” inflating profits over a number of years. The case has been one of the most damaging accounting scandals to hit Japan in recent years.
“It has been revealed that there has been inappropriate accounting going on for a long time, and we deeply apologize for causing this serious trouble for shareholders and other stakeholders,” a statement issued by the company said.
It added, “Because of this, Hisao Tanaka, our company president, and Norio Sasaki, our company’s vice chairman… will resign today.”
Tanaka, 64, and Sasaki, 66, both joined Toshiba in the early 1970s.
hit president of Toshiba, Hisao Tanaka (C), Chairman Masashi Muromachi (L), and corporate executive vice president, Keizo Maeda (R), bow at the beginning of a press conference at the company’s headquarters in Tokyo on July 21, 2015.
Sasaki served as president of Toshiba from June 2009 to 2013. The period includes most of the years in which the company has been inflating its profits.
Following Tanaka’s resignation, Masashi Muromachi will take over as interim president, the company statement said.
The findings have been revealed less than two months after the country adopted a corporate governance code hoping to usher in a new era of transparency for shareholders.
The Toshiba panel, headed by a former prosecutor, said the corporate culture in Toshiba was such that underlings could not challenge their powerful superiors who were bent on boosting profits at any cost.
“Inappropriate accounting was systematically carried out as a result of management decisions… betraying the trust of many stakeholders,” said a summary of the report, which was released by the firm late Monday, adding, “Toshiba had a corporate culture in which management decisions could not be challenged.”