Business / Corporate

GPIF sues Toshiba for losses over accounting scandal

Bloomberg

Japan’s $1.3 trillion Government Pension Investment Fund is suing Toshiba Corp. for losses on its investments after an accounting scandal sent the conglomerate’s shares plunging.

GPIF is seeking damages of about ¥900 million, said Shinichirou Mori, a spokesman for the fund. The losses related to shares bought by GPIF’s external fund managers in 2009 through a secondary share offering, he said. The Wall Street Journal reported the news earlier on Thursday.

“We bought the shares seven years ago and that’s how much we’ve calculated our losses on those holdings to be,” Mori said on the phone on Thursday. GPIF has previously sued other companies including Seibu Railway Co. and Livedoor Inc., he said.

Toshiba has been plagued by record losses and executive resignations after unveiling years of padded profits at the conglomerate, which makes everything from computers to nuclear power equipment. Shares have tumbled more than 40 percent since April 2015, when the company said it would appoint a committee to investigate possible problems with its accounting.

The GPIF has sought to bolster its stewardship of the nation’s pension savings amid a broader push by Prime Minister Shinzo Abe to make investors more engaged with the companies they invest in. The country introduced guidelines for shareholders in 2014, which GPIF has pledged to follow, and started a corporate governance code last year.

Japan Trustee Services Bank Ltd., which holds the Toshiba shares on behalf of GPIF, filed the suit at the Tokyo District Court on May 6, Mori said. JTSB representatives attended the first hearing at the court on Tuesday, he said.