Toshiba inflates lawsuit against ex-execs over financial scandal

GMT 15:02 2016 Wednesday ,27 January

Arab Today, arab today Toshiba inflates lawsuit against ex-execs over financial scandal

Toshiba says it expects a 550 billion yen net loss
Tokyo - AFP

Toshiba said Wednesday it has inflated its damages claim against a group of former executives by a whopping tenfold over a profit-padding scandal that badly damaged the reputation of one of Japan's best-known firms.

The vast conglomerate said it was now seeking a combined 3.2 billion yen ($27 million) from five former top managers including three presidents, up from an earlier claim for a total of 300 million yen.

Toshiba, which sells everything from rice cookers to nuclear reactors, said it boosted the size of its lawsuit after Japan's market watchdog last month slapped the 140-year-old company with a record $60 million fine over the affair.

The firm also said it paid more than two billion yen in additional auditing costs to correct past financial statements.

Last year a company-hired panel found the firm had inflated profits by about $1.2 billion since the 2008 global financial crisis.

It (Other OTC: ITGL - news) found top executives had pressured underlings systematically to inflate profit figures to hide poor results.

Toshiba's business was dented by the global downturn, while the 2011 Fukushima disaster killed off demand for atomic power at home in a big blow to the firm's key nuclear division.

It was one of the most damaging accounting scandals to hit Japan in recent years. The case forced an incumbent president and seven other top executives to resign last year and hammered the company's share price.

Toshiba is facing lawsuits from investors, while Moody's and Standard & Poor's downgraded its credit rating to junk in the wake of the scandal.

Known for its televisions and electronics, including the world's first laptop personal computer and DVD player, Toshiba has a range of other operations including power transmission and medical equipment.

Last month the company rolled out a wide-ranging restructuring which included thousands of job cuts, as it warned it would book a record $4.5 billion annual loss.

The company has about 200,000 employees globally.


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