Last July, a pillar of so-called “Japan Inc” crashed when Toshiba admitted it had inflated profits by a stunning $1.2 billion for no less than 7 years, with fabricated figures amounting to 30% of the company’s “profits” since 2008.
In the immediate aftermath of the scandal becoming public, Toshiba’s then- CEO Hisao Tanaka said on Tuesday at a news conference, following a 15-second bow of contrition, that he ‘felt the need to carry out a major overhaul in our management team in order to build anew our company.” ‘We have suffered what could be the biggest erosion of our brand image in our 140-year history.” As a result, Tanaka, who together with five members of his senior staff, resigned after bowing down to, and apologizing to investors.
Of course, the only reason Mr. Tanaka apologized and resigned is not because he was actually cooking books the for an unprecedented 7 years, a period during which the CEO most certainly received tens if not hundreds of millions in equity and profit-linked compensation, but because he was caught. This was confirmed because none of his bonuses had been clawed back even as “a panel of external lawyers and accountants said on Monday there was a ‘systematic’ and ‘deliberate’ attempt to inflate profit figures amid a corporate culture in which employees were afraid to speak out against bosses’ pushes for unrealistic earnings targets.”
This post was published at Zero Hedge on Dec 27, 2016.
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