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Rachel Gallo

Accounting Scandal at Toshiba Leads to CEO’s Resignation

by Rachel Gallo | Dun & Bradstreet Editor

July 22, 2015 | Comments Off on Accounting Scandal at Toshiba Leads to CEO’s Resignation

Japanese conglomerate Toshiba announced its CEO and other executives resigned as a result of the company’s accounting scandal. The departures include CEO and president Hisao Tanaka, vice chairman Norio Sasaki (also Tanaka’s predecessor), as well as seven other board members. Chairman Masashi Muromachi will serve as interim president and CEO while the company searches for a successor. Toshiba, which makes products ranging from TVs to nuclear power plant equipment, overstated its earnings by $1.2 billion over a seven year period. The company began investigating itself in April after its energy division’s finances fell under suspicion. However, the investigation uncovered illegal accounting practices in other divisions as well, a systemic problem Toshiba admitted was caused by unrealistic financial goals set by top management for its divisions. Subordinates subsequently doctored divisions’ books to meet financial expectations.