Toshiba scandal as profits plunge, executive resigns over entertainment expenses

Toshiba headquarters in Tokyo, Japan. Photo / Getty Images

Electronics giant Toshiba is in turmoil after an executive resigned over expenses payments and company profits plummeted.

The Japanese conglomerate’s chief operating officer Goro Yanase resigned over allegedly improper entertainment expenses.

The company has faced a series of financial and personnel upheavals in recent years.

Reuters said Toshiba was suffering from weak demand for hard disk drives from data centre customers.

Jarden analysts said Toshiba published a disappointing third quarter result, featuring a record loss of ¥16.6 billion (NZ$197 million), down from a net profit of ¥95m in the same period in the previous year.

Toshiba also cut full-year operating income estimates.

Toshiba said quarterly operating profit fell 88 per cent to ¥5.3b, far below a consensus estimate of ¥37b.

The Financial Times said 57-year-old Yanase resigned after auditors found he repeatedly submitted entertainment expenses without reporting the names of attendees.

That was a violation of company rules, the FT reported.

The alleged misbehaviour reportedly happened when Yanase was a Toshiba subsidiary board member in 2019, before his role as COO.

Yanase’s profile was still on Toshiba’s global website today, where he was described as a current director.

According to the website, he joined the company in 1991.

In 2021, top Toshiba executive Nobuaki Kurumatani resigned.

According to the New York Times, his resignation happened soon after a shareholder-initiated investigation into Toshiba management practices.

Toshiba in late 2021 said it was restructuring, and announced a plan to spin off its energy infrastructure and computer devices businesses.

In March last year, Satoshi Tsunakawa resigned as chief executive.

“We feel strongly that there is an urgent need to transform the company,” Toshiba chair Akihiro Watanabe said this week.

Toshiba was now mulling a NZ$23.7b buyout proposal from a consortium led by a Japanese private equity firm.

The Financial Times said that would be Japan’s largest take-private deal.