Toshiba’s chief executive and president Hisao Tanaka has resigned after the company said it had overstated its profits for the past six years.
He will be succeeded by chairman Masashi Muromachi, with vice-chairman Norio Sasaki also stepping down.
On Monday, an independent panel appointed by Toshiba said the firm had overstated its operating profit by a total of 151.8bn yen ($1.22bn, £780m).
The overstatement was roughly triple an initial estimate by Toshiba.
The company’s business empire stretches from home electronics to nuclear power stations.
“It has been revealed that there has been inappropriate accounting going on for a long time, and we deeply apologise for causing this serious trouble for shareholders and other stakeholders,” the company said in a statement.
“Because of this Hisao Tanaka, our company president, and Norio Sasaki, our company’s vice chairman… will resign today.”
Tanaka told a media conference that “we have a serious responsibility”, adding that the company would need to “build a new structure” to reform itself.
Tanaka, 64, and Sasaki, 66, both joined Toshiba in the early 1970s.
Sasaki served as Toshiba president between June 2009 and June 2013, covering most of the period during which the firm inflated the profits.
Atsutoshi Nishida, an adviser and former chief executive from 2006 to 2009, also gave up his post.
Tanaka and his predecessors are among eight high-level executives who have now resigned after the independent report found senior management involved in a scheme to inflate profits over several years.
People took to social media to express their concern at the scandal.
One twitter user remarked “It’s appalling how long this cover up could have carried on”, while another said “clean out the entire company! Toshiba needs to carry on its legacy properly.”
The company was created by a merger in 1938, but its roots date back to 1875.
Toshiba’s accounting scandal began when securities regulators uncovered problems as they probed the company’s balance sheet earlier this year.
One line that the investigators looked into was that executives set unrealistic targets for new operations after worries that the 2011 Fukushima disaster may hit Toshiba’s nuclear division.
While the report did not specifically refer to Fukushima, it did say that pressure within Toshiba was strong in the accounting years of 2011 and 2012.
The findings mean Toshiba will have to restate its profits for the period between April 2008 and March 2014. It is unclear whether it will affect the company’s results for the year ending March 2015.
The finance minister, Taro Aso, said the case could undermine confidence in corporate governance in Japan.
He added the accounting irregularities at Toshiba were “very regrettable”.
Japan’s government has been trying to regain global investors’ confidence with better corporate governance after Olympus was found to have covered up $1.7bn in losses in late 2011, in what was until now Japan’s worst corporate governance scandal.
Tomoaki Nakamura, research vice president at market research firm IDC Japan, said it was not a surprise that Tanaka, along with the other executives had stepped down.
“In Japan, this news has been in the media for two months already,” he told the BBC from Tokyo, stating that “What they need to be afraid of is criminal action by the [US] Securities and Exchange Commission.”
The report’s findings are expected to lead to the restatement of earnings, a board overhaul and potentially hefty fines for Toshiba.
The inquiry found that the misreporting of profits began after the financial crash seven years ago, when senior managers began imposing unrealistic performance targets.
“Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors,” the report said.
“Therefore, when top management presented ‘challenges’, 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.”
One business expert, Loizos Heracleous, Professor of Strategy and Organisation at Warwick Business School, told the BBC there was a wider problem in Japanese business culture.
“Corporate culture in Japan is hierarchical and based on a long history of emphasis on loyalty, doing one’s best, and doing all that is possible to avoid bringing shame to one’s group,” he said.
“These values, combined with unrelenting performance pressures from the market, can sometimes tempt executives to take shortcuts, and can also make it difficult for employees to ask embarrassing or probing questions of executives.”
APPLY: WTO opens entry for 2022 young professionals programme
The World Trade Organisation (WTO) has opened applications for its 2022 Young Professional Programme (YPP).
The programme provides opportunity for young professionals to enhance their knowledge of the organisation and international trade issues.
In 2021, 14 professionals out of 2,400 candidates were selected for the programme from Bangladesh, Belize, Dominican Republic, Eswatini, Guatemala, Georgia, Indonesia, Malawi, Mauritania, Namibia, Nicaragua, Nigeria, Chinese Taipei and Thailand.
WTO said “The YPP is a unique opportunity to gain hands-on experience which can help open the door for future professional opportunities in the field of multilateral diplomacy and global trade.
“The YPP selection gives preference to young professionals from developing and least-developed countries that are members of the WTO and whose nationals are currently under-represented or not represented in the organization’s Secretariat.
“The programme is part of the Secretariat’s overall goal to increase its diversity to better reflect the make-up of its membership.”
To be eligible, applicants must be of age 32 as of January 1, 2022, and selected candidates will work at the WTO secretariat for one year, starting from the beginning of next year.
The areas of work at the programme includes accessions, agriculture, dispute settlement, intellectual property rights, market access, media and external relations, WTO rules, trade and development, trade and environment, trade in services and investment, trade facilitation, trade policy analysis and trade-related technical assistance.
WTO said candidates must have advanced university degree in law, economics, or other international trade-related subjects relevant to WTO work; must possess relevant expertise or continued academic study in a field of interest to the work of the WTO.
Equally, candidates must similarly have a minimum of two years relevant work experience.
The trade organisation further said selected candidates will be paid $3821.66 (N1,454,141.63 million) monthly and applications can be accessed on the WTO e-Recruitment website and should be completed no later than 29 April 2021.
Buhari receives briefing from Osinbajo
Vice President Yemi Osinbajo on Monday briefed President Muhammadu Buhari at the Presidential Villa, Abuja.
The President had last Thursday returned to the country after a16-day medical trip to London, United Kingdom.
He left Nigeria on Tuesday, March 30, briefly after a security meeting with defense and intelligence chiefs as well as other security sector managers.
Gunmen attack Imo police station, kidnap officer
A police officer has been abducted in an attack on Mbieri Divisional Police Headquarters in Mbaitoli Local Government Area of Imo state on Thursday morning.
This comes three days after the state Police Command headquarters and Owerri Correctional Center were attacked while 1,884 inmates released.
A resident of Mbieri said the gunmen released the suspects in custody.
However, the policemen on duty were said to have engaged the attackers in a gun duel but they were reportedly overpowered by the gunmen who had sophisticated weapons.
A community leader, Nokey Ebikam, told newsmen that the police divisional headquarters was not burnt but only freed the suspects in detention after vandalizing it.
Police Public Relations Officer in the state, Orlando Ikeokwu, confirmed the attack on the police station but did not go into details.
It was gathered that aside the officer who was abducted, two others sustained injuries in the incident which is the second major attack on a police station since an armed gang invaded the state police headquarters on Monday.
The Police authorities have blamed the attacks on the outlawed Indigenous People of Biafra (IPOB) but the group has distanced itself from the attacks.
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