Sun, Nov 08, 2015 - Page 13 News List

Toshiba sues ex-executives


Toshiba’s former presidents Atutoshi Nishida, left, Hisao Tanaka, center, and Norio Sasaki shake hands at the company’s headquarters in Tokyo on Feb. 26.

Photo: AFP

Toshiba Corp yesterday said that it has sued five former executives for damages over their alleged roles in a huge accounting scandal, as it announced a deep six month operating loss.

The announcement came as the 140-year-old company attempts to restore its reputation following a billion-dollar profit-padding scandal, stemming from top executives pressuring underlings to systematically inflate financial figures for years.

Following a probe by a company-hired panel of experts, Toshiba said it was demanding the men, including three former presidents, pay a combined ¥300 million (US$2.4 million).

The amount could increase if the firm finds additional grounds to seek further damage, Toshiba said.

The company is expected to release the outcome of the experts’ investigation tomorrow, after reviewing privacy concerns for individuals and customers concerned.

“We sincerely apologize for causing great concern to shareholders, investors and other stakeholders,” Toshiba said in a statement.

Toshiba, which sells everything from rice cookers to nuclear reactors, has admitted that it had inflated profits by about US$1.2 billion since the 2008 global financial crisis.

In what is considered to be one of the most damaging accounting scandals to hit Japan in recent years, the case forced the incumbent president and seven other top executives to resign earlier this year.

In related news, Toshiba announced a whopping operating loss of ¥90 billion for the six months to September.

The operating loss — its first in six years for the first half — compares with a ¥137.8 billion profit for the same period last profit.

The firm cited deterioration of its PC and appliances businesses, while its mainstay chip business faced falling prices that also pressured profits.

Nonetheless, Toshiba managed to see a six-month net profit of ¥37.3 billion, down 29 percent from the same period last year, after selling stakes in subsidiaries.

The firm’s overall sales during the period dropped 4.5 percent to ¥2.97 trillion, Toshiba said.

The company said it was not able to announce forecasts for the year to March next year.

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