Toshiba inflated profits by $1.2 billion with top execs' knowledge - investigation

A logo of Toshiba Corp is seen in Tokyo, Japan, June 25, 2015. T REUTERS/Yuya Shino -

TOKYO (Reuters) - Toshiba Corp overstated its operating profit by 151.8 billion yen ($1.22 billion) over several years in “institutional” accounting irregularities involving top management, an independent committee said in a report on Monday.

Toshiba Chief Executive Hisao Tanaka and his predecessor, Vice Chairman Norio Sasaki, were aware of the overstatements of profits and delays in reporting losses in a corporate culture that “avoided going against superiors’ wishes,” the panel said in a summary report filed by Toshiba to the Tokyo Stock Exchange.

The overstatement was roughly triple Toshiba’s initial estimate. Sources have said Tanaka and Sasaki would resign in the coming months and most of the board would be replaced to take responsibility for Japan’s worst corporate scandal in years.

The report says much of the improper accounting, stretching back to fiscal 2008, was intentional and would have been difficult for auditors to catch.

The committee is to hold a news conference at 7 p.m. (1000 GMT) on Tuesday, according to the filing.

Reporting by Ritsuko Ando and Reiji Murai; Writing by William Mallard; Editing by Mike Collett-White