Toshiba Boss to Resign Over Scandal

Hisao Tanaka, president and chief executive of Toshiba, is to resign after the company said it had overstated its profits for the past six years.

Vice chairman Norio Sasaki is also stepping down.

An independent panel appointed by Toshiba said the firm had overstated its operating profit by a total of 151.8bn yen, which is the equivalent of around £780m. The overstatement was thought to be triple an initial Toshiba estimate.

In a statement Toshiba said: "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.

"Because of this Hisao Tanaka, our company president, and Norio Sasaki, our company's vice chairman... will resign today."

The accounting scandal was thought to have started when security regulators uncovered problems as they investigated the company's balance sheet earlier this year.

Finance minister for Toshiba, Taro Aso, said the case could end up undermining confidence in corporate governance in Japan and said the accounting irregularities were "very regrettable".

The report's findings are expected to lead to a board overhaul, the restatement of earnings and potentially large fines for Toshiba.

The report said: "Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors.

"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."

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