Toshiba ‘facing $1.37b in lawsuits over 2015 scandal’

Toshiba said it was hit with two dozen lawsuits demanding a total of 108.4 billion yen (S$1.37 billion) in damages from a 2015 profit-padding scandal that badly damaged its reputation and shredded its share price.

The eye-popping total was revealed in a statement on Tuesday to announce that it was being sued for 43.9 billion yen in damages in a new lawsuit.

Including the latest action filed this week, Toshiba said it was facing 26 separate legal claims.

The lawsuits involve both individuals and institutional investors, including Japan’s national pension fund, the world’s biggest.

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They are seeking damages after Toshiba’s share price tanked some 40 per cent in the wake of revelations two years ago that top executives had pressured underlings to cover up weak results after the 2008 global financial crisis.

Toshiba, best known for producing television sets and electronics, saw its vast business dented by the worldwide crisis, while the 2011 Fukushima disaster squashed demand for atomic power at home, in a big blow to the company's key nuclear division.

Top executives complained of “shameful results” that could not be made public, and a company-hired panel in 2015 found that they had masterminded a years-long scheme to hide the firm’s poor earnings.

It sparked the resignation of the company president and a string of other top executives.

Some of the lawsuits have gone to trial but have not resulted in a ruling so far, a company spokesman said on Tuesday.

Toshiba is also facing separate woes linked to massive losses and financial misconduct claims at its troubled US nuclear unit Westinghouse Electric, which is sitting in bankruptcy protection.

The troubled firm has delayed publishing its earnings three times since January and it warned last month that it likely lost 950 billion yen in the just-ended fiscal year.

Fears are growing about Toshiba’s survival as it tries to sell its prized memory-chip business to raise cash.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on June 14, 2017, with the headline 'Toshiba ‘facing $1.37b in lawsuits over 2015 scandal’'. Print Edition | Subscribe