Toshiba's corporate culture, Kuomintang needs clean up, crippled police in Delhi

Masashi Muromachi, chairman and interim president of Toshiba Corp (left) with Hisao Tanaka, outgoing president and chief executive officer of Toshiba Corp., during a news conference in Tokyo on July 21, 2015.
Masashi Muromachi, chairman and interim president of Toshiba Corp (left) with Hisao Tanaka, outgoing president and chief executive officer of Toshiba Corp., during a news conference in Tokyo on July 21, 2015.PHOTO: BLOOMBERG

Editorial Notes is a selection of editorials from newspapers in the Asia News Network (ANN).

1. Toshiba needs to correct corporate culture that flouts rules

In its editorial on July 23, 2015, The Yomiuri Shimbun calls on Toshiba to do all possible to regain trust.

A third-party panel looking into Toshiba Corp's improper accounting practices has released an investigative report.     PHOTO: BLOOMBERG

It is outrageous that a major company that represents Japan repeatedly padded its profits on a corporate-wide basis.

A third-party panel looking into Toshiba Corp's improper accounting practices has released an investigative report.

The report acknowledged that the postponement of posting losses and other accounting irregularities were carried out systematically under managerial judgment during the leadership of three successive presidents - current President Hisao Tanaka, Vice Chairman Norio Sasaki and Atsutoshi Nishida, an adviser.

Toshiba's in-house investigation revealed about 50 billion yen (S$550 million) of overstated profits, but the panel put the sum at more than 150 billion yen.

It is natural for six other directors, as well as the current and former presidents, to resign from their posts and for the company to conduct a major shakeup of its top management.

Toshiba must do everything it can to regain trust and prevent a recurrence of such accounting irregularities.

The main cause for the manipulation of its accounts lies in the company's excessive emphasis on corporate profits.

At meetings to discuss performances, the president and other top executives set excessive earnings targets, which they dubbed "challenges," and demanded that each section achieve them.

In one case, the top management issued an extraordinary directive that profits should be increased by 12 billion yen in just three days before the end of the settlement term, forcing front line operators to inflate profits.

In addition, the report said a "corporate culture" in which employees could not object to superiors became a hotbed of long-standing accounting irregularities.

The practice to attach more importance to superiors' orders rather than regulatory compliance cannot be overlooked.

It is necessary to correct a culture that gives little credence to acceptable rules.

Internal controls that are supposed to monitor injustices within the company from an independent position failed to function.

Of the five members at the audit committee involved in accounting and business affairs, three were outside directors, while the remaining two were former Foreign Ministry officials.

"No members were well-versed in financial and accounting affairs," the report said in a critical assessment.

Toshiba had been regarded as a pioneer in corporate governance reform as the company introduced outside directors earlier than other major companies.

However, it cannot be helped if such reforms are described as window dressing and without real substance.

The company must drastically review its management structure.

A professional auditing firm also failed to detect the padded profits.

The Toshiba case presents a difficult task - how to bring to light a cover-up operation that involves top management.

There seems to be no end to accounting irregularities by major listed companies, including accounting irregularities at Olympus Corp. that were discovered in 2011.

The reason for this may be because many executives in top management regard past cases as someone else's problem.

We hope all companies seriously examine their internal systems so as not to undermine confidence in information disclosure by Japanese companies and trust in the securities market.

2. Kuomintang needs to get its act together

In its editorial on June 23, 2015, The China Post calls on the party to improve internal affairs

Hung Hsiu-chu, the ruling Kuomintang presidential Candidate, waves the party flag during the KMT's party congress in Taipei on July 19, 2015.      PHOTO: AFP

The Kuomintang on Sunday finally ended its months-long drag over the party's presidential candidate pick that had managed to be both highly dramatic and boring at the same time.

Despite having only one candidate for most of the primary, the party appeared to be wavering and hesitant.

Party heavyweights all bowed out of the primary yet they seemed to be ever present in the race, ready to jump in to save the day by taking the campaign away from Hung Hsiu-chu.

Supporters of these contenders on the sideline kept waving the banner for their heroes, demanding Hung's candidacy be removed even through she had passed all the hurdles according to the party rulebook.

The motivations of Hung's detractors were of course not merely ideological.

Hung is seen as a "deep-blue" politician with little appeal or campaign experience outside Greater Taipei.

There are doubts over whether she can carry the south in the presidential election and, perhaps more importantly for many KMT politicians, the legislator election, both of which will be held on Jan. 16, 2016.

With the confirmation of her ticket on Sunday, Hung formally began her national campaign. Yet there are probably better ways to launch a presidential bid.

The KMT was forced to expel five members days before the decision in a move widely seen as a "pre-emptive break up."

One of the five members kicked out by the KMT last week had agreed to represent the pan-blue People First Party in the 2016 legislator election, while the other four were believed to be quitting the party soon.

It is not a good sign when KMT Chairman Eric Chu acknowledges the party to be suffering a trend toward "abandoning ship." "You can change ship for your political reasons ... but please do not defame the KMT," Chu said on July 9.

What's worse is that the attempt to boost party morale at Hung 's confirmation on Sunday led to fiery rhetoric that can only do harm to the candidate.

The most quoted line at Sunday's national congress did not come from Hung but from a party representative from Taipei.

The representative, a borough chief from a KMT Taipei stronghold, told the KMT national congress that "The Taiwanese people have failed the KMT for the party's trouncing in the 9-in-1 elections (of local government chiefs) last year."

His ill-conceived words will go down in history as one of the most electorate-alienating comments ever delivered in Taiwan.

While the gross insensitivity of the comment originated from the borough chief, its self-centeredness came as a response to President Ma Ying-jeou's statement earlier in the national congress that "The KMT has not failed the Taiwanese people in the past eight years."

There is nothing wrong in defending one's legacy.

Ma's assertions that his government has worked hard on Taiwan's international relations and domestic policy reforms are arguable.

Yet the negativity in the president's statement and the "us versus them" undertone belies the party's besieged mentality, which is picked up and amplified by the senseless borough chief.

The KMT needs to get its act together if it wants to have a fighting chance in the 2016 elections. Instead of defending itself against the public, it should recognise the basic fact that a political party should try to be close to the people.

The Taiwanese people have not failed the KMT, they owe the party nothing. The ruling party that came to power by capturing both the Presidential Office and a legislative super majority has only itself to blame.

Instead of trying to put on a brave face, the party should recognise the clear fact that it is the underdog in the 2016 elections. Only by bracing the ugly truth can the party move on.

3. Crippled cops in the capital city

In its editorial on July 23, 2015, The Statesman calls on the police to improve its act.

 Indian police detain a Youth Congress activist after they storm a barricade during a protest against the Bhartiya Janta Party led Government near parliament house in New Delhi, India on July 22, 2015.   PHOTO: EPA

An old saying avers that when thieves fall out only the police benefit: the opposite is probably equally valid.

Hence criminal types would be thrilled that the Delhi police is in disarray because rather than build a credible case for giving locally elected representatives a greater say in the "control" of the force the chief minister has preferred to denigrate cops at large.

In more ways than one.

The sufferers will be the genuine aam aadmi (common man) ~ not the brash and inexperienced political outfit which has usurped that designation.

For there is no way in which the constabulary can remain "on the ball" when Arvind Kejriwal resorts to near-invective, and a meeting between ministers of the NCT government and the police commissioner exacerbates a difficult situation.

Sure policemen have ever been at the "receiving end", but when they are so publicly slammed their morale is likely to collapse and resentment will brew.

The average citizen is hardly concerned with whether the police functions under the local or the central government, his lament is that the quality of policing is pathetic, the security of women is pitiable, and indeed goons are running amuck.

Similarly, the rank and file of the police care little about whom their superiors "report" to, they regret that they remain under-staffed (even if the situation is better than in other cities), their equipment needs upgrade, and their miserable living conditions worry none in authority.

Rather than a concerted attempt to render them more efficient they are being pilloried, and have becomes pawns in an ugly power struggle.

Administrative supervision of the police has been controversial for decades now.

The central government maintains that Delhi being the national capital it must be responsible for law and order: but in reality the home minister/ministry fail to execute their responsibility, and the cops know that pandering to VIP whims is their ticket to "success".

Nobody in North Block appreciates that the city extends far beyond Lutyens' luxury enclave, and given the leadership deficit in the force over recent years the common man is getting a raw deal.

Even as the "squabble" rages both the home minister and the commissioner need to accept that what they deliver is disgraceful.

A special cell, perhaps in the PMO, is urgently needed to "take charge" ~ Raj Niwas has proved a miserable flop.

Simultaneously it must be asked if despite an ego boosted by a "magic mirror" of fairy-tale fantasy the AAP government has the capacity to transform the police, make it sensitive to the citizens' needs.

There has been no dramatic improvement ~ apart from much "drama" ~ in other spheres of local governance under Kejriwal & Co. Else there would have been no recourse to a costly image-projection effort on the "idiot-box".