Toshiba has announced that its CEO, Hisao Tanaka, is resigning because the company exaggerated its operating profits by a staggering $1.2 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:

ā€œWithin Toshiba, there was a corporate culture in which one could not go against the wishes of superiors. Therefore, when top management presented ā€˜challenges,ā€™ 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.ā€

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Toshibaā€™s vice-chairman, Norio Sasaki, has also resigned, though thereā€™s no evidence that either he or Tanaka gave direct orders to fiddle the accounts. Japanā€™s finance minister, Taro Aso, has referred to the irregularities as being ā€œvery regrettableā€.

[Toshiba via Bloomberg]

Image by AshtonPal under Creative Commons license.

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