Toshiba may axe staff in revamp after $1.8b accounting scandal

TOKYO • Toshiba Corp may lay off staff in its underperforming home appliances, TV and PC businesses, and seek a partner for its nuclear operations to overhaul the company after a US$1.3 billion (S$1.8 billion) accounting scandal, its chief executive said yesterday.

Mr Masashi Muromachi's remarks come a day after nearly 2,000 shareholders turned up at an investor meeting to demand an explanation on the accounting scandal that has hammered Japan's best-known company.

He also said Toshiba has identified 30 more executives involved in the accounting scandal that has already led to the resignations of three former presidents.

The managers will be punished, but will stay on at the company, Mr Muromachi told reporters at a briefing in Tokyo yesterday.

Toshiba has lost about US$6 billion of market value since the company withdrew its earnings forecast in May, and announced an accounting probe that was later expanded.

Mr Muromachi won shareholder approval on Wednesday to lead the company at an extraordinary meeting that included calls for his resignation from investors.

He had overseen the company's chip business, and served as chairman during the more than six-year period, when managers at operations from personal computers to power plants overstated earnings.

The company veteran, who has been with Toshiba for the last 40 years, said he will step down within three years.

"The latest accounting problems might have been driven by the fact that some of our businesses have lost earning power. We must urgently take action in these businesses," Mr Muromachi told a roundtable of reporters.

As part of its overhaul, Toshiba has launched a new management team, which won approval from shareholders on Wednesday.

He said that the restructuring steps may temporarily hurt the company's capital base. Being placed on the Tokyo Stock Exchange's watch list, Toshiba is practically unable to raise funds through bond and equity issuance.

The company plans to finance restructuring by tapping into bank loans if needed, Mr Muromachi added.

Toshiba's Tokyo-listed shares have lost 40 per cent in value since the scandal broke in early April. They closed at 306.9 yen yesterday, up 6.5 per cent.

REUTERS, AFP

A version of this article appeared in the print edition of The Straits Times on October 02, 2015, with the headline 'Toshiba may axe staff in revamp after $1.8b accounting scandal'. Print Edition | Subscribe