Toshiba ex-CEOs unlikely to face charges over scandal: source

Toshiba Corp's then President and Chief Executive Officer Hisao Tanaka speaks during a news conference after an opening ceremony of the company's Hydrogen Energy R&D Center in Tokyo April 6, 2015. REUTERS/Toru Hanai

TOKYO (Reuters) - Prosecutors believe it would be difficult to bring charges against former top executives of Toshiba Corp 6502.T over the conglomerate's $1.3 billion accounting scandal, a person briefed on the matter said on Friday.

The likely lack of indictments of officials who ran the laptops-to-nuclear giant marks a step by Toshiba away from its second scandal in recent years, though it still faces a lawsuit from the world’s biggest pension fund over inflating profits.

The Securities and Exchange Surveillance Commission has been probing former Toshiba presidents Hisao Tanaka, Norio Sasaki and Atsutoshi Nishida over possible fraud in last year’s massive accounting violation, which pushed Toshiba to streamline its businesses, announce 14,000 job cuts and sell its medical unit.

But the Tokyo District Public Prosecutors Office has told the SESC it would be hard to make a criminal case over Toshiba’s practice of padding personal computer profits by selling components to assemblers at inflated prices because the transactions were real and because the practice was not confined to Toshiba, the source told Reuters.

The investigation will continue, but charges typically do not follow such a notification from prosecutors.

Press officials for the prosecutors could not immediately be reached, while those for the SESC did not have any immediate comment.

An investigation last year found widespread accounting errors throughout Toshiba and blamed a corporate culture in which employees found it difficult to question their superiors.

The Financial Services Agency in December fined Toshiba a record 7.4 billion yen ($73 million) in December for the accounting violations.

Japan’s $1.4 trillion Government Pension Investment Fund said last month it was suing Toshiba for $9 million for losses over the scandal.

Reporting by Takahiko Wada; writing by William Mallard; editing by David Clarke