Toshiba Corps's CEO Hisao Tanaka and a bunch of senior officials resigned for their involvement in Japan's biggest accounting scandal in years. “I see this as the most damaging event for our brand in the company's 140 year history,” Tanaka addressed a news conference. “I don't think these problems can be overcome overnight.”
He will be temporarily replaced by chairman Masashi Huromachi, who is considered best to steer the company through its current unrest, until a Tanaka successor steps in. A total of eight officials resigned on Tuesday and Tanaka said that the company is now considering appointing outside directors to over half of its board seats. Presidents of the laptops to nuclear conglomerate, Vice Chairman Norio Sasaki and adviser Atsutoshi Nishida, will also step down after the third-party report proved their part in the overstatement of profits dating back to the 2008 financial year.
Report by an outside panel of accountants and lawyers said Toshiba had overstated its operating profit by 151.8 billion yen , roughly three times Toshiba's initial estimate. It said Tanaka and Sasaki pressured business divisions to meet difficult targets and knew they were overstating profits and delaying the reporting of losses, amid a culture of not going against the wishes of superiors.
Even though the former CEO did not dispute the allegations, he said, “It's not my understanding that I gave orders for improper accounting, but the reality is that such an observation has been made.”
