No accounting for taste

21 July 2015 By Quentin Webb

A probe found $1.2 bln of phantom profits at the electronics giant. Corporate reforms mean firms in Japan are already under huge pressure to show they are better-run and more profitable. Now they will have to work even harder to prove that overhauls are not just cosmetic.

This content is for Subscribers only

Context News

Japan’s Toshiba Corp overstated its operating profit by 151.8 billion yen ($1.22 billion) over several years in accounting irregularities involving top management, an independent investigation commissioned by the company said in a report on July 20.

Toshiba President and Chief Executive Hisao Tanaka and his predecessor, Vice Chairman Norio Sasaki, were aware of the overstatement of profits and delay in reporting losses in a corporate culture that “avoided going against superiors’ wishes,” the investigating committee said in a report filed by Toshiba to the Tokyo Stock Exchange.

The overstatement was roughly triple Toshiba’s initial estimate. Sources have previously told Reuters that Tanaka and Sasaki would resign in the coming months and most of the board would be replaced to take responsibility for the shortcomings.

Shares in Toyota rose 2.8 percent by 10:00 a.m. Tokyo time (0100 GMT) on July 21.

Email a friend

Please complete the form below.

Required fields *