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Businesses Data Storage Japan The Almighty Buck

Toshiba CEO, 8 Others, Resign Over $1.2 Billion Accounting Cover-Up 85

The BBC reports that Toshiba president and chief executive Hisao Tanaka, along with vice-chairman Norio Sasaki, former chief executive Atsutoshi Niched, and six other executives, has resigned from the company in the wake of an accounting scandal: 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. Asia Times has an article that delves into the pressure which drove Tanaka and others to misstate their revenue figures so drastically. From that piece: Top management and the heads of in-house companies acted on “the shared goal of padding nominal profits,” the report said. President Hisao Tanaka and immediate predecessor Norio Sasaki, now vice chairman, denied intentionally delaying loss-booking, but those who worked below them thought they were being instructed to do so, according to the report. Top management would assign “challenges,” or earnings improvement targets, at monthly meetings with the heads of in-house companies and subsidiaries. These targets were especially aggressive in fiscal 2011 and fiscal 2012, when Sasaki was president. In-house company chiefs felt enormous pressure to meet the goals, the committee concluded. After the announcement of Tanaka's resignation, the company's stock actually rose six percent. CNBC explains: Getting the bad news out appears to have eased investors' concerns about the stock. "The total problem has been quantified and there's a likely chance the CEO will have to quit. That's been seen as the end of that," said Amir Anvarzadeh, director of Japan equity sales at BGC Securities.
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Toshiba CEO, 8 Others, Resign Over $1.2 Billion Accounting Cover-Up

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  • this is Japan (Score:5, Insightful)

    by turkeydance ( 1266624 ) on Tuesday July 21, 2015 @09:04AM (#50151683)
    resign?
    • Re:this is Japan (Score:5, Insightful)

      by Opportunist ( 166417 ) on Tuesday July 21, 2015 @09:19AM (#50151767)

      This is CEOs. Normal people go to jail for embezzling, CEOs resign with a golden parachute.

      I just wish they'd have to jump out of a plane with it...

    • by Anonymous Coward
      In 'merica you get a slap on the wrist and keep going. See Dell Computers.
  • They should learn from my country's statespeople: NEVER RESIGN!!!

  • That kind of accounting would not be scandalous here, and likely result in huge bonuses instead. I see great futures for them on Wall Street or with any of a number of legal or accounting firms.
    • That kind of accounting would not be scandalous here, and likely result in huge bonuses instead. I see great futures for them on Wall Street or with any of a number of legal or accounting firms.

      1.2 billion here, 1.2 billion there, after a while you're talking about big money.

    • That kind of accounting would not be scandalous here, and likely result in huge bonuses instead.

      Fat bonuses for short term profit margins are the reason for the scandal to begin with.

      • That kind of accounting would not be scandalous here, and likely result in huge bonuses instead.

        Fat bonuses for short term profit margins are the reason for the scandal to begin with.

        In other countries, it is scandalous to do such things. Here it is "business as usual" or "the infinite wisdom of the (invisible hand of the) free market".

  • 1.2 Billion (Score:5, Informative)

    by MozeeToby ( 1163751 ) on Tuesday July 21, 2015 @09:24AM (#50151801)

    Remember folks. When you lie, cheat, and steal for 1.2 billion dollars, we will talk about all the pressures you are under and force you to resign in disgrace. If you rob $100 from the cash register at quickie-mart when the cashier isn't looking, we'll talk about how you're the scourge of society and put you away for 20 years.

    • Re: (Score:2, Interesting)

      by tekrat ( 242117 )

      Unless you're black... Then the cops just shoot you dead for stealing $20... or even less.

      This planet makes no logical sense. We elevate sports people to godhood while scientists and teachers are vilified. We make TV celebrities out of people with sex tapes, but can't show the sex tape on TV. Everything is topsey-turvey, forwards is backwards, up is down. Steal a billion and you're promoted, steal a loaf of bread and you're a thug. When corporations don't pay taxes, that's just good business, but when peopl

      • I wouldn't either, if I had to look at it through the hyperbole-tinted glasses you seem to wear.
      • In Japan? Seriously? You really think the cops do that? There aren't any black people, the ones they do have are concentrated in Tokyo, and the majority of them are from Africa, not America. The violent culture just isn't there. The Africans are just happy to be out of Africa and the African-Americans are playing up the hip-hop bit to screw lots of Japanese girls.

        I'm curious if you can point out a time in human history when everything made logical sense. Much like your post above, it doesn't make an

      • Your observations are correct. Conclusion is wrong.

        It's not a bug, but a feature of the society owned and operated for the benefit of the top 0.5% by wealth.

      • Unless you're black... Then the cops just shoot you dead for stealing $20... or even less.

        What a fascinating story. I'm sure it is on the internet somewhere. Perhaps you could provide a link?

    • Remember folks. When you lie, cheat, and steal for 1.2 billion dollars, we will talk about all the pressures you are under and force you to resign in disgrace. If you rob $100 from the cash register at quickie-mart when the cashier isn't looking, we'll talk about how you're the scourge of society and put you away for 20 years.

      And? Adults repeat the same pattern over and over, the same pattern they learned during schooling. At school you're judged based on your scores. With good scores, a youthful indiscretion is worth a mere reprimand. Similarly, during adulthood in the (American) society, you're judged based on the $$ you earn. A CEO is (usually) at the top of the scale, and as long as his bad behavior doesn't exceed the company's boundaries, he is forgiven.

      In a way, the CEO acts on behalf of the rest of the company. His act

    • They didn't actually steal 1.2 billion. They claimed to have earned 1.2 billion. If you claim to have earned $100, nobody will give a shit.

      And, these executives will surely face jail time.

  • How much of this was due to weakness in the PC market? Declining shipments have hurt the industry as a whole, and I imagine Toshiba is largely dependent on sales of laptops. Someone I spoke to suggested they didn't believe Lenovo's numbers for the past couple years. Anyone have any knowledge or insight into Toshiba's financials? I'm wondering if this is more than greedy executive leadership, maybe more a canary in the coal mine for the industry as a whole.
    • I doubt they're that dependent. According to their 2013 earnings [toshiba.co.jp] (going back a year in light of the article), 26% of their sales are in Energy and Infrastructure, 21% in Electronic Devices (which also includes televisions, tablets, storage, etc.), 19% Community Solutions (I have no idea), and 20% Lifestyle Products & Services (Small appliances, air conditioners, small audio systems, etc.). Just because they're not highly visible overseas anymore doesn't mean they don't make a ton of crap for the home ma
  • Lie the equivalent of $1,200 and you go to prison, lie about $1,200,000,000 and you get to resign with your golden parachute. It's all about scale.
  • You are just not going to outdo the Americans [reuters.com]. And resign? Please! Here you get promoted, might even become president of the country, and the job will be waiting for you when you finish your term/sentence..

  • is basically just massive scale tax avoidance procured by hiring ex ministers who work for big accountancy firms.

    these people should be imprisoned for life and all their assets impounded but instead they just resign and get lucrative consultancies do the same thing elsewhere

  • One need only recall Kurosawa's "The Bad Sleep Well" (1960) to note that nothing really has changed.

  • by frog_strat ( 852055 ) on Tuesday July 21, 2015 @11:38AM (#50152893)
    My company had been talking to them about buying several thousand tablets running Android, on to which we would load a custom application. When we went back last year to talk seriously about the terms, they revealed they had signed some deal with Microsoft, to sell only Windows tablets. At the last minute they offered up some half hearted Android solution, but it was too late. I speculate they were unhappy with the thin tablet profit margins, and trying to justify charging premium prices by advertising MS features as premium. The irony is, this is the second company I have worked for that decided to spend the money and effort to move away from a Windows or CE OS, to an Android OS.
  • by dhaen ( 892570 ) on Tuesday July 21, 2015 @04:20PM (#50155121)
    Accounting coverups will become more common in future as more transparency is forced upon them. The Japanese corporations still live in the old world, and in that world rising sales and profits was the norm where future figures could be almost plucked from the air. How things have changed. They now struggle with a deflating economy and competition from China and Korea that is impossible to beat.

    I really don't know where Japan is heading. Although it has little foreign debt the government is heavily in monetary debt to the people. The future is bleak.

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