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Toshiba CEO and execs quit over $1.2bn six-year accounting scandal

Bottom line completely wrong for years, says Japanese giant

Toshiba CEO Hisao Tanaka and seven other bigwigs have quit after a probe concluded profit figures had been inflated beyond their real values.

The Japanese electronics giant said in a brief statement [PDF] today that $1.2bn (£770m, 151.8bn yen) was incorrectly added to Toshiba's income-before-tax figures in the 2008 to 2014 fiscal years.

The resignations follow the conclusion of a two-month investigation into Toshiba's accounting practices by an outside panel headed by a lawyer. The full results of the report were delivered on July 20 in Japanese, and have yet to be translated into English.

Toshiba said "inappropriate accounting" practices occurred in three different business units: PCs, semiconductors, and visual products. Tosh also reported incorrect percentage of completion numbers over the period in question.

As a result, Hisao Tanaka has ejected from his representative executive officer, president and chief and executive officer and director roles. Also out are Norio Sasaki, vice chairman of the board of directors, and Hidejiro Shimomitsu, Masahiko Fukakushi, Kiyoshi Kobayashi, and Toshio Masaki, all of whom served in representative executive officer, corporate senior executive vice president and director roles. Keizo Maeda, a former representative executive officer, corporate senior executive vice president and director, will only retain his corporate senior vice president role.

Toshiba has also taken resignations from Makoto Kubo, chairman of the audit committee and director, and Atustoshi Nishida, advisor to the board.

Further penalties for the ousted directors and executives will be announced later this month.

Toshiba plans to begin a management restructure to be determined by a committee of advisors and directors. A new team of bosses is expected to be in place by mid-August. In the meantime, Toshiba has named Masashi Muromachi as the interim CEO, while Fumiaki Ushio will take over as senior vice president in charge of day-to-day activities.

Tosh has also pushed the publication of its financial figures for the full fiscal 2014 year back to August 31 from July 21. The first quarter of fiscal 2015 will be reported on September 15, with an extraordinary general meeting of shareholders planned to take place some time later that month. ®

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