Toshiba has risen to $ 800 million after the resignations of top managers – RBC

The Executive Director of Toshiba Corporation Hisao Tanaka

Photo: REUTERS 2015

At the close of stock trading in Tokyo on July 21, Toshiba technology stocks rose in price by 6.1%. Thus the company’s market capitalization in one day increased by ¥ 100 billion (about US $ 800 million). The reason for this “rally” was the resignation of the company’s top management, led by executive director Hisao Tanaka, associated with the scandal around the financial statements Toshiba.

Shares of the company closed today at ¥ 400 per share. According to Reuters, quotes peaked from July 7. The scandal erupted around the Toshiba July 11 after reports that independent auditors have found serious violations in the accounts of the company for the past few years. Preliminary results of the investigation group of Auditors published the day before, saying that from 2008 to 2014 the company illegally attributes to himself the extra profits: in general during this time (without inflation) income was overstated by ¥ 152 billion ($ 1.2 billion).

A group of independent experts was set up in mid-May on the initiative of the most Toshiba, led by its former investigator Tokyo Koichi Ueda. Initially, the top management said that the company is interested in an impartial verification of accounting practices in a limited segment of the business Toshiba: it was about the three parts of a corporation related to infrastructure projects in the energy and transport. The reason for the internal investigation was suspected violations of management in the financial statements and the related review its own estimates annual profits in early May.

But, having studied the financial statements and corporate correspondence for several years, experts Group Ueda revealed massive violations accounting for the majority of activities Toshiba. The first is winding data operating profit of fashion considerations. From the amount of ¥ 152 billion over half had violations in fiscal year 2012. Sami violations concerned departments of the results of the production of computers, televisions and semiconductors.

In the course of the investigation, experts have concluded and the nature of corporate culture in Toshiba. For example, examining corporate correspondence, they found that in December 2008 at a meeting of leadership was discussed based on the results forecast for October-December, and the then head of the concern Atsutoshi Nishida ordered the accountants at the time of publication of reports in January to fix “catastrophic» ¥ 18,4 млрд operational loss per ¥ 500 million in fictitious profits. “The Toshiba existed atmosphere in which it was impossible to argue with the authorities,” – sums up the analyst team.

Following the resignation of Tanaka became interim head of the corporation Masashi Muromachi, still held the post of non-executive director of Toshiba. Under his leadership, the concern will restore investor confidence. The first reports will be adjusted over the past seven years. Despite the optimism of traders, the management of the Tokyo Stock Exchange set up more carefully. The representative of Japan Exchange Group (which owns the stock exchange), told the news agency Bloomberg, that group would hold its own review of the corporate system of Toshiba. If the company, according to the exchange, it does take a systemic “recovery”, the leadership of the Toshiba will not more than 18 months on the reform of management, or the company is waiting for delisting.