Toshiba Corp. illegally inflated company earnings by at least $1.2 billion, an investigation reveals, resulting in the resignation of company president and CEO Hisao Tanaka, vice chairman Norio Sasaki and adviser Atsutoshi Nishida, according to Bloomberg
Chairman Masashi Muromachi, who is taking over as Toshiba's interim president, said in a briefing that the company aims to rebuild, but "a renewal of the management structure is necessary." A new management team is targeted to be installed in mid-August.
Toshiba said in a statement that at least 152 billion yen (more than $1.2 billion) in earnings need to be corrected in the company's books.
The prodding of financial regulators set off the investigation in April after close scrutiny of a Toshiba division revealed some accounting irregularities, which led Toshiba to hire private investigators to examine its accounting practices, the New York Times reported.
The investigators put the blame on senior executives and called it a "systematic involvement, including by top management, with the goal of intentionally inflating the appearance of net profits."
Toshiba financial officials, it said, had "deliberately provided insufficient explanations to auditors, with the intention of carrying out a systematic cover-up."
Toshiba's share price had recovered more than 6 percent on Tuesday after the resignations.
The Japanese firm had been in existence for 140 years and has a market capitalization of $13.6 billion.
