The disclosure of the country’s biggest corporate scandal in years could lead to the restatement of earnings plus a board overhaul and potentially hefty fines at the computers-to-nuclear conglomerate.
Toshiba president and chief executive Hisao Tanaka and his predecessor vice chairman Norio Sasaki were aware of the overstatement of profits and delay in reporting losses in a corporate culture that ‘avoided going against superiors’ wishes’ the investigating committee said in a report filed by Toshiba to the Tokyo Stock Exchange.
The overstatement was roughly triple Toshiba’s initial estimate. Sources have said Tanaka and Sasaki would resign in the coming months and most of the board would be replaced.
The report said Tanaka and Sasaki had set operating profit targets that the heads of divisions were required to meet – applying pressure by hinting at withdrawing from areas that underperformed.
‘Within Toshiba there was a corporate culture in which one could not go against the wishes of superiors’ the report said.