Toshiba has sued five former executives seeking damages of 300 million yen ($3.45 million) over alleged financial mismanagement, involving $1.84 billion in inflated net profits, according to ft.com. The lawsuit followed the company’s release of financial results for the fiscal first half, with its first operating loss in six years, totally 90.5 billion yen ($1.04 billion).
Japan’s stock exchange has ordered Toshiba to pay a record fine of 91.2 million yen ($750,000) in the wake of its $2 billion accounting scandal, according to the Financial Times. Toshiba is also expected to face another fine from Japan’s financial regulators. It has been reported that the Tokyo Stock Exchange has placed the stock “on alert”, which requires the company to file a report in 2016 on its internal controls improvements. If the company fails to do so, shares will be delisted.
Toshiba’s network of global major appliances factories are to be reorganised as part of wide-reaching structural reforms to bring weak divisions back on track. This will be no small job, as around 90% of Toshiba’s large appliances are made in China, Indonesia and Thailand.
Toshiba Corp interim President Masashi Muromachi has been proposed by the company as a more permanent CEO officer beyond September following the dramatic exit last week of a host of executives, over their roles in one of Japans biggest accounting scandal according to Japanese media.
The impact of today’s shocking fall from grace by Toshiba CEO Hisao Tanaka and his two immediate predecessors, Norio Sasaki, (who has been serving as Toshiba’s vice chairman) and Atsutoshi Sasaki, chief executive from 2005 until 2009 will effectively end the company’s consumer electronics operations, according to analysts.