Toshiba bosses blamed for USD 1.2 bn accounting scandal

Toshiba's top executives were involved in "systematically" inflating profits by USD 1.2 billion over several years, an independent panel said today, in a stinging indictment of one of Japan's best-known firms.
Current President Hisao Tanaka and his predecessor are both expected to resign over the profit-padding scandal after investigators uncovered irregularities stretching back to 2008.
The panel, headed by a former Tokyo prosecutor, painted the picture of a corporate culture where underlings could not challenge powerful bosses who were intent on boosting profits at almost any cost.
"Inappropriate accounting was systematically carried out as a result of management decisions... Betraying the trust of many stakeholders," according to a summary of the report released by the firm.

"Toshiba had a corporate culture in which management decisions could not be challenged," it added, ahead of the release of the full report tomorrow.
Toshiba's accounting scandal, one of the most damaging to hit Japan in recent years, began when securities regulators uncovered irregularities as they probed the company's balance sheet earlier this year.

The findings released today mean Toshiba will have to restate its profits by 151.8 billion yen for the period between April 2008 and March 2014. It is unclear whether it will affect the fiscal year ending March 2015.
"In some cases top management and division leaders appeared to have shared a common objective to inflate profits," the panel said.

"Employees were pressured into inappropriate accounting by postponing loss reports or moving certain costs into later years."
Best known for its televisions and electronics, including the world's first laptop personal computer and DVD player, Toshiba has more than 200,000 employees globally and also operates in power transmission and medical equipment.
Among the divisions affected by the inflated profits are the infrastructure, audio-visual and semiconductor businesses, the summary said.