Toshiba Corp executives yesterday faced the wrath of shareholders who demanded an explanation after one of Japan’s best-known companies was hammered by a billion-dollar accounting scandal.
Nearly 2,000 shareholders turned up at an investor meeting outside Tokyo, peppering a new management team with questions about the affair, which led to the resignation of Toshiba’s president and seven other top executives in July.
“There are many admirable people working at Toshiba who must have expressed concerns about what was going on — who ignored them, who killed their opinions?” one shareholder surnamed Kodama asked.
New president Masashi Muromachi’s deep bows to the audience — a common act of contrition among Japanese executives — seemed to do little to persuade investors that he could overhaul the 140-year-old firm’s corporate culture.
Shareholder Takayuki Otake called on Toshiba’s new boss to reveal what he knew about the scheme, sparking applause among other investors.
“I truly regret what happened,” said Muromachi, who temporarily cut his salary in response to the affair and who noted he was cleared of any wrongdoing.
A company-hired panel found top executives pressured underlings to inflate Toshiba’s bottom line for years.
Mitsuro Nagai blamed the problem on Japan’s rigid “salaryman” culture and a general tendency not to challenge bosses.
“The salarymen are too obedient to authority,” he said.
“This happens everywhere, but especially in Japan — one cannot say clearly what they are thinking,” the shareholder said.
Shareholders yesterday approved plans to cut the size of Toshiba’s board while appointing more outside directors, a move welcomed by some.
“The company seems to be making efforts to change past practices, so I think they are going in the right direction,” 65-year-old Hiroshi Yajima said.
Another investor voiced concern that the years-long scheme — which saw profits fraudulently boosted on paper by about US$1.2 billion since the 2008 global financial crisis — would attract huge lawsuits against Toshiba and further damage its share price.
“I need to know whether it’s time to cut my losses and sell the shares before they just become pieces of paper,” a retired woman in her sixties said, adding that it was her first time attending the meeting.
Toshiba’s Tokyo-listed shares have lost 40 percent since the scandal broke in early April. They closed up 2.91 percent at ¥300 yesterday.
Toshiba said it added a ¥400 billion (US$3.3 billion) credit commitment with banks. The agreement has a two-year term and brings the total loan facility to ¥762 billion, the company said in a statement. Toshiba did not disclose the cost of the new credit line and said it would supplement the liquidity of cash reserves.
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