Toshiba's CEO Has Quit Over $US1.2 Billion Profit Scandal

Toshiba's CEO Has Quit Over a $US1.2 Billion Profit Scandal

Toshiba has announced that its CEO, Hisao Tanaka, is resigning because the company exaggerated its operating profits by a staggering $US1.2 billion over the past six years.

A team of financial investigators has discovered an environment of intimidation which led to the massive accounting lapses. The BBC reports that the investigators wrote:

"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."

Toshiba's vice-chairman, Norio Sasaki, has also resigned, though there's no evidence that either he or Tanaka gave direct orders to fiddle the accounts. Japan's finance minister, Taro Aso, has referred to the irregularities as being "very regrettable".

[Toshiba via Bloomberg]

Picture: AshtonPal/Flickr

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