Ex-Toshiba chief questioned over falsified financial reports

Kyodo

The Securities and Exchange Surveillance Commission has questioned former Toshiba Corp. President Hisao Tanaka about falsified earnings reports, sources close to the matter said Saturday.

Tanaka, who was quizzed on a voluntary basis, is believed to have denied any wrongdoing. The securities watchdog also plans to question Tanaka’s predecessors, Norio Sasaki and Atsutoshi Nishida, who are suspected of instructing subordinates to misreport the financial results of Toshiba’s loss-making personal computer business, the sources said.

The SESC will then examine whether to seek criminal prosecution of the three on suspicion of falsifying financial reports in violation of the Financial Instruments and Exchange Act, they said.

A third-party panel looking into Toshiba’s accounting irregularities said last year Tanaka had long served as a senior official in charge of computer parts procurement and was aware of padded profits in the section before assuming the presidency.

Improper accounting practices were found in recording transactions by its infrastructure, television and semiconductor units in addition to the personal computer business.

In December last year, the Financial Services Agency imposed a record ¥7.37 billion ($66 million) fine on Toshiba for falsifying financial reports, following recommendation by the SESC. The scandal-hit company paid the fine in January.

Toshiba is seeking up to ¥3.2 billion in a damages suit filed against five former executives, including the three former presidents.