Roundup: Toshiba president resigns over 1.2 bln U.S. dollar accounting scandal

Toshiba Corp.'s President Hisao Tanaka resigned on Tuesday following allegations of an accounting scandal that implicated some of the electronic maker's senior executives.

The multinational conglomerate headquartered in Tokyo also saw its vice chairman and advisor Norio Sasaki and Atsutoshi Nishida step down following a board meeting earlier in the day, with the company announcing that current chairman Masashi Muromachi will step in to double as interim president.

At a press conference at Toshiba's head office in Tokyo following the announcement of his resignation, Tanaka apologized to the firm's shareholders over the accounting irregularities, saying that while he saw nothing wrong with pursuing profits, accounting practices should follow strict and proper rules.

He said that ongoing investigations by a third-party panel which unearthed the initial scandal would be taken seriously by the company and due to the now tainted image of the company -- the worst of its kind in its 140-year history -- it would work hard to rebrand itself.

Tanaka went on to say that the firms 200,000 employees would do their utmost everyday henceforth to help regain the trust and understanding of their consumers, but reiterated that it was the company's executive-level representatives, including himself, who are responsible for the problem and accept the third-party's findings.

The panel had concluded on Monday that Toshiba had inflated records of its profits by 151.8 billion yen (around 1.2 billion U. S. dollars) over seven years and that this had continued in the company in a "systematic" manner.

The panel said that Toshiba's top executives had, over the years, pressured the company's senior officials to chase unrealistic profit goals and internal checks and balances had failed to eradicate Toshiba's aggressively "top down" corporate culture that forbids juniors to questions the demands or action of their seniors.

Finance Minister Taro Aso said that Toshiba's actions could have a negative effect on broader markets here unless proper corporate governance is in place.

"We could lose trust in Japanese markets and the Tokyo Stock Exchange unless true corporate governance is in place," Aso said.

The Japan Business Federation, known here as Keidanren, said Tuesday that Sasaki had also stepped down as vice chairman of the powerful business lobby.

Sasaki will also resign from the various government panels he sits on, Economy Minister Akira Amari said Tuesday.

Toshiba said it will select its new management by mid-August and seek approval for the new executive committee from its shareholders at a general meeting a month later. Endi