1. Foreign investors sue Toshiba over accounting scandal

Foreign investors sue Toshiba over accounting scandal

A group of investors, mostly foreign institutions, are suing Toshiba Corp in a Tokyo court for 16.7 billion yen ($162.3 million) in damages, over a $1.3 billion accounting scandal uncovered last year.

By: | Tokyo | Published: October 13, 2016 2:09 PM
Toshiba said in a statement on Thursday that the 45 unnamed shareholders were seeking compensation for damages caused by its "inappropriate accounting". (Reuters) Toshiba said in a statement on Thursday that the 45 unnamed shareholders were seeking compensation for damages caused by its “inappropriate accounting”. (Reuters)

A group of investors, mostly foreign institutions, are suing Toshiba Corp in a Tokyo court for 16.7 billion yen ($162.3 million) in damages, over a $1.3 billion accounting scandal uncovered last year.

Toshiba said in a statement on Thursday that the 45 unnamed shareholders were seeking compensation for damages caused by its “inappropriate accounting”. It will take an unspecified provision to cover any eventual payout, Toshiba said.

The laptops-to-nuclear conglomerate has been sued by 15 groups and individuals since it first admitted to reporting inflated profits going back to 2008, including Japan’s public pension fund. GPIF, the world’s biggest pension fund, has been shifting into shares to attempt to boost returns.

Thursday’s case, however, is the largest – the remaining suits are seeking a combined 15.3 billion yen in compensation.

Toshiba is still overcoming the reputational and share price hit of an investigation last year that found widespread accounting errors throughout its sprawling business, blaming a corporate culture in which employees found it difficult to question their superiors.

High profile Japanese companies from Olympus to Fukushima Daichi nuclear power plant operator Tokyo Electric Power Co (Tepco) have faced shareholder damages suits over the years.

Tepco shareholders in 2012 sued the utility’s executives for a record 5.5 trillion yen. That case, still ongoing, accused former Tepco directors of ignoring multiple warnings of a possible tsunami and of failing to prepare for a severe accident.

In 2008, five former executives of Janome Sewing Machine Co were ordered by a court to pay 58.3 billion yen compensation to the company, local media reported at the time, saying it was the biggest compensation pay out to date.

Toshiba shares rose on the day, trading up 3.2 percent at 366.4 yen.

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