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Saturday, December 10, 2022

Toshiba chief to quits over doctored books

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Toshiba’s chief executive is stepping down to take responsibility for doctored books which inflated profits at the Japanese technology manufacturer by 151.8bn yen.

Toshiba acknowledged a systematic cover-up, which began in 2008, as various parts of its sprawling business including computer chips and personal computers were struggling financially.

Tokyo-based Toshiba’s prospects in nuclear power, one of its core businesses, were shaken after the 2011 Fukushima disaster set off public fears about reactor safety, making new nuclear plants unlikely in Japan.

All 48 of the nation’s working reactors are now offline.

Chief executive Hisao Tanaka is meeting reporters later to formally announce his resignation. Japanese government officials said they have been notified of the plan.

The scandal highlights how Japan is still struggling to improve corporate governance despite recent steps to improve independent oversight of companies.

In 2011, Olympus, which makes medical equipment and cameras, was embroiled in a scandal after its president, Briton Michael Woodford, blew the whistle on the company’s cover-up of losses.

Olympus eventually acknowledged it hid 117.7bn yen in investment losses dating back to the 1990s. And Mr Woodford won some praise in Japan for his courage in bringing dubious old-guard company practices to light.

Japanese society is conformist and values team work so much that it tends to frown upon whistleblowers, and their legal protection lags behind compared with those in the West.

Toshiba has repeatedly apologised to shareholders and customers. It has set up an outside investigation group to analyse why the scandal happened and propose what needs to be done to prevent a recurrence.

Japanese media reports said Mr Tanaka’s predecessors, Norio Sasaki, now a vice chairman, and Atsutoshi Nishida, an adviser, will also give up their posts.

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