Toshiba CEO resigns over accounting scandal

Toshiba’s Chief Executive and President, Hisao Tanaka, has resigned

Toshiba’s Chief Executive and President Hisao Tanaka has resigned after the company said it had overstated its profits for the past six years.

Tanaka will be succeeded by chairman Masashi Muromachi, with Vice-Chairman, Norio Sasaki, also stepping down.

Mr Tanaka, 64, and Mr Sasaki, 66, both joined Toshiba in the early 1970s. Mr Sasaki served as Toshiba president between June 2009 and June 2013, covering most of the period during which the firm inflated the profits.

On Monday, an independent panel appointed by Toshiba said the firm had overstated its operating profit by a total of 151.8bn yen ($1.22bn, £780m). The overstatement was roughly triple an initial estimate by Toshiba.

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The findings mean Toshiba will have to restate its profits for the period between April 2008 and March 2014. It is unclear whether it will affect the company’s results for the year ending March 2015.

The company’s market value is hovering around 1.673 trillion yen ($13.4 billion).
Full-year earnings are due on August 31, and analysts at Bernstein expect Toshiba’s stock to continue to drop.