Here’s all you need to know about the huge Toshiba financial scandal

It’s all gone wrong for the Japanese multinational

The president and CEO of Toshiba, Hisao Tanaka, has resigned from the company after a massive accounting scandal came to light.

Toshiba overstated its operating profit by 151.8bn yen (£780m) over the past six years, an independent investigation found.

A Toshiba statement said: “It has been revealed that there has been inappropriate accounting going on for a long time, and we deeply apologise for causing this serious trouble for shareholders and other stakeholders.

“Because of this Hisao Tanaka, our company president, and Norio Sasaki, our company’s vice chairman… will resign today.”

Chairman Masashi Muromachi will replace Tanaka.

Toshiba revealed it was aware of accounting irregularities back in April but, it seems, greatly underestimated the scale of those problems. It appointed an independent firm to dig through the books, which wrote a report revealing the extent of the accounting scandal.

To put it into perspective, we thought Tesco’s £250m accounting problems were big, but Toshiba’s overstatement is three times the size of the British supermarket’s.

The report found senior managers had pressured the company into maintaining unrealistic targets after the global financial crisis.

It said: “Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors.

“Therefore, when top management presented ‘challenges’, division presidents, line managers and employees below them continually carried out inappropriate accounting practices to meet targets in line with the wishes of their superiors.”

 

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