TOKYO: Toshiba shares jumped yesterday as an independent report ended months of uncertainty about accounting problems at one of Japan’s best-known firms, with top executives expected to resign over the affair.
In a stinging indictment, the report said managers were involved in ‘systematically’ inflating profits by US$1.2 billion over several years, in one of the most damaging accounting scandals to hit Japan in recent years.
Toshiba’s Tokyo-listed shares jumped 5.78 per cent to 398.6 yen (US$3.20) at the start, before settling back to sit 4.91 per cent higher in afternoon trading.
Current president Hisao Tanaka and his predecessor are both expected to resign over the profit-padding after investigators uncovered irregularities stretching back to 2008.
The company-hired panel, headed by a former Tokyo prosecutor, painted the picture of a corporate culture where underlings could not challenge powerful bosses who were intent on boosting profits at almost any cost.
“Inappropriate accounting was systematically carried out as a result of management decisions… betraying the trust of many stakeholders,” according to a summary of the report released by the firm late Monday.
“Toshiba had a corporate culture in which management decisions could not be challenged,” it added, ahead of the release of the full report on Tuesday afternoon.
Analysts said the share price jump was the result of some investors buying back into the battered stock, which has lost more than 20 per cent since May.
“The numbers are out and investors have no further reasons to sell for the moment, so we are seeing some repurchasing momentum,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management, told Bloomberg News.
“There is no question that the current management will have to change… But it’s difficult to change the company culture.”
The scandal risked further fallout, including lawsuits, but was unlikely to bring one of Japan Inc’s giants to its knees, said SMBC Nikko analyst Yutaka Ban.
“While the profit downgrade isn’t a small amount of money, it should not significantly harm the company’s credit strength,” Ban said. — AFP