As Toshiba’s accounting scandal deepens, CEO Hisao Tanaka has announced his resignation in order to take responsibility for the group overstating revenue by more than $1.2bn. The news comes after several months of investigations, which began after Toshiba announced profits that were approximately triple the initial forecasts given.
The resignation came as no surprise to many
The resignation came as no surprise to many as Tanaka has been named among those in senior management for instructing the delay of reporting booking losses. Ardent profit targets for the group’s infrastructure business, which includes construction projects, electronic toll booths and smart metres, are also attributed to causing the anomalies. According to The Japan Times, Tanaka had sent emails and made phone calls to staff members pushing them to meet ambitious targets.
Tanaka stands down along with former CEO and current Vice Chairman Norio Sasaki, as well as other members of the board.
As a result of a probe by the Securities and Exchange Surveillance Commission, the Group was unable to report results in March, leading Toshiba’s shares to slump by 16 percent in April.
The investigation has also been extended to include other operations within the electronics conglomerate and may even alter the earnings reported for fiscal years between 2009 and 2013.
It is expected that investigators will recommend an overhaul of Toshiba’s management structure when findings are announced next week. The scandal highlights the need for a more rigorous implementation of Prime Minister Abe’s ongoing campaign to improve corporate governance in Japan.
A replacement for Tanaka and others have not yet been disclosed.