Toshiba CEO Hisao Tanaka Resigns Over $1.2 Billion Accounting Scandal

Hisao Tanaka - CEO Of Toshiba Resigns

Toshiba chief executive and president Hisao Tanaka has resigned following a $1.2 billion account scandal that has rocked the company.

Also resigning are eight board members, including vice chairman Norio Sasaki. Toshiba’s current chairman, Masashi Muromachi, was named interim president.

The company, known for producing everything from consumer electronics to nuclear energy technology, came under fire after various accounting irregularities were discovered. The company overstated profits by 151.8 billion yen ($1.2 billion) over a seven-year period, according to an independent committee.

“We are taking what has happened very seriously and we would like to apologize from our hearts to, starting with the shareholders, and to all the stakeholders,” Tanaka said at a news conference.

In a letter to investors sent out on Monday the remaining team at Toshiba said it would “take procedures to correct past financial results as necessary.”

Problems at the company started in April 2015 when various irregularities in accounting practices were discovered at its energy division. By May 2015, Toshiba canceled its year-end dividend and postponed earnings. That decision forced analysts to downgrade the company’s investment recommendations and earnings forecasts.

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Since accounting irregularities were first discovered in April, shares at the tech giant have declined by nearly 20%. The company’s market valuation has fallen to 1.673 trillion yen ($13.4 billion).

The company is expected to announce full-year earnings on August 21. Analysts believe the company’s share will continue to decline after its earnings call.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.