Giant company takes knock in bid to end scandal

[caption id="attachment_99375" align="alignright" width="300"] CHANGED CULTURE: Toshiba president and chief executive Masashi Muromachim is surrounded by reporters at the end of a news conference announcing the earnings report of 2014 fiscal year[/caption]

GIANT corporation Toshiba said yesterday it would book a $318-million (R1.9-billion) annual loss to account for a $1-billion (R13.9-billion) profit-padding scandal that hammered the reputation of one of Japan’s best-known companies.

The vast 140-year-old conglomerate revised its results for the past fiscal year to March 2015, booking the loss that reversed a previously expected large annual profit.

Toshiba’s new president, Masashi Muromachi, said the company – which sells everything from vacuum cleaners to nuclear reactors – would restructure certain divisions and overhaul a culture fixated on profits at any cost.

“We have caused tremendous problems for investors at home and abroad,” he said in Tokyo.

“The company will work towards recovering Toshiba’s credibility.”

Investors cheered the revised figures as bringing a sense of closure to the saga, with the firm’s Tokyo-listed shares jumping nearly 6% and closing 1.25% higher.

“There is a sense of comfort in that the company was able to get its earnings out,” SMBC Nikko Securities manager Chihiro Ota said.

He said other companies dented by accounting scandals, including camera maker Olympus, had bounced back after putting out revised earnings.

The new results follow months of delay as an outside panel probed Toshiba’s finances in the wake of revelations that top executives had pressured underlings to inflate profits by about $1.2billion (R16.7-billion) since the 2008 meltdown. – AFP