Toshiba adds outsiders to board amid accounting scandal
- 18 August, 2015 16:35
Scandal-hit Toshiba is trying to inspire investor confidence with a revamped board of directors following the resignation of executives amid a massive accounting fraud that came to light earlier this year.
The Japanese conglomerate, which makes everything from memory chips to nuclear power plant equipment, has shuffled its board so that seven of its 11 members are external. The outside directors are all Japanese.
Masashi Muromachi, who had been appointed interim leader of the company, will stay on as president, Toshiba said.
Former president Hisao Tanaka and other executives resigned after a committee reviewing its earnings said in July that the company padded its operating profit by about ¥156 billion ($1.25 billion) over six years to the end of 2014.
The sum included about ¥4.4 billion of incorrect earnings revealed in an internal probe by Toshiba. Other executives took pay cuts.
The company also said it expects to post a net loss for the year that ended March 31, 2015, and will book ¥127 billion ($1.02 billion) in impairment charges related to its nuclear power, semiconductor, appliance and automotive businesses. The firm's earnings report for the year is being revised amid the scandal, which erupted after securities regulators began probing company reports.
Last month, Toshiba acknowledged that it is being sued in a class-action lawsuit by securities owners in California related to information it provided about the cost of infrastructure projects.
Known for introducing flash memory in the 1980s, Toshiba is made up of nearly 600 companies around the world and has over 200,000 employees.