Welp, you can probably count this as the biggest corporate scandal of the year. Toshiba has come forth to admit that their CEO — Hisao Tanaka — and his immediate underlings were involved in a book-fixing scheme that showed more than $1.2 billion fake profit over the course of several years.
As a result, the CEO and the two other executives — vice chairman Norio Sasaki and adviser Atsutoshi Nishida — have resigned from their positions.
According to USA today, Toshiba was pressured as far back as 2008 to turn the company around after their core computer businesses started falling short of expectations. The company’s leadership set unrealistic earnings expectations, which is probably what moved their employees (who supposedly acted without Tanaka’s knowledge) to start juking the stats.
It’s said no personal gain was achieved as a result of this scandal, with motives being more about saving the company from impending doom more than trying to line one’s own pockets. Regardless, it’s a pretty big violation of the trust their investors and shareholders had, and the little bit of trust left will have to be repaired with honest plans to reform the company going forward.
And, for what it’s worth, there is a sliver of hope that Toshiba can right the ship. The company’s stock actually rose 6% following the revelation of the scandal, which is seen as a sign that the situation can be repaired with the right plan, foundation and — by extension — CEO.