Tokyo — Toshiba CEO Hisao Tanaka has resigned after the company was found to have overstated profits by more than $1.2 billion since 2008.
An independent panel investigating the matter placed the blame for the scandal on Tanaka and other current and former executives. In response, eight of Toshiba's 16 board members will resign.
“I deeply apologize to all stakeholders for causing these problems,” Tanaka said at a press conference. “This has resulted in the largest damage ever to our corporate image.”
Toshiba chairman Masashi Muromachi will take over as interim chief executive.
The 300-page report implicated Tanaka and his two immediate predecessors, Norio Sasaki, who has been serving as Toshiba's vice chairman, and Atsutoshi Nishida, chief executive from 2005 until 2009 and now a paid adviser to Toshiba. All three have resigned.
According to a Wall Street Journal report, the panel, led by a former top prosecutor, said the executives put intense pressure on the company’s business units to achieve unrealistic profit targets. Management sometimes issued such challenges shortly before the end of a fiscal quarter or year, encouraging division heads to cook the books, the panel said.
“The improper accounting procedures were continuously carried out as a de facto policy of the management,” the report said. “And it was impossible for anyone to go against the intention amid Toshiba’s corporate culture.”