Published On: Sun, Jul 12th, 2015

Toshiba President Expected To Resign Over Alleged Padding Of Company Profits


Sources have reported the companies president placed intense pressure on his staff to ensure they met strict profit targets.

Following an independent probe which found accounting irregularities at Toshiba Corp it’s believed the companies president is likely to resign.

Japan’s Securities and Exchange Surveillance Commission is planning to investigate the company after a third-party committee who has been looking into the company’s accounting practices submits a report as early as July 21. Once the investigation is complete the SESC will assess what impact the accounting practices have placed on investors and issue penalties if necessary.

Toshiba which manufactures products ranging from batteries to nuclear reactors is believed to have allegedly overstated around 200 billion yen ($1.6 billion) in group operating profits for the five years up to March 2014. Toshiba withdrew its latest earnings forecasts on May 8 and also cancelled the year-end dividend.

Hisao Tanaka, the current president and Norio Sasaki who served as president between June 2009 – June 2013 (currently Vice Chairman) are believed to have been putting excessive pressure on subordinates to achieve profit targets and are to blame for the profit-padding according to reports. According to unnamed officials Tanaka is expected to resign over the probe.

The share price of Toshiba has tumbled 26 percent this year to close at 377.2 yen on Friday from its peak of 539.40 in December 2014. Shares in the company are expected to be put on a watch list at the Tokyo Stock Exchange.

Receive News & Ratings Via Email

Enter your email address below to get the latest news and analysts' ratings for your stocks with MarketBeat's FREE daily email newsletter: