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).
The operating loss for the April to September period compared to a profit of 137.87 billion yen ($1.6 billion) the previous consecutive period. Net profit declined by 29% and revenue dropped 4.5% due to a slump across its core business including laptops and televisions.
In the company’s earnings release report, Toshiba chief financial officer, Masayoshi Hirata (pictured) said, “It is clear that we will continue to be in the red during the second half unless we do everything we can to compile and implement our restructuring measures for the TV and PC businesses.”
The former executives being sued include three former presidents, Mr Tanaka, Norio Sasaki and Atsutoshi Nishida, as well as two former chief financial officers.
The lawsuit, filed at the Tokyo District Court, came after an outside panel of three lawyers found that the five former executives neglected their duties over the improper accounting practices.