Toshiba’s shares have been split in half since late December when it first reported multibillion-dollar losses at US nuclear unit Westinghouse Electric and exposed allegations of accounting fraud by senior executives of the division. Yesterday, Toshiba said it was delaying the release of its October-December results for the second time as it investigated the embarrassing allegations, with growing fears that the Japanese corporate mainstay could be delisted from the stock market. Tokyo. Chairman Satoshi Tsunakawa also said the company is considering selling its controlling stake in Westinghouse and has as a priority trying to get the energy giant’s mixed results off its books.
The scandal came less than two years after his reputation – and his track record – was damaged by separate revelations that senior executives pressured underlings to cover up poor results years after the financial crisis World 2008.
Many questions remain unanswered. But Toshiba’s latest issues – like the $ 1.7 billion loss coverage at camera giant Olympus several years ago, employees faking fuel economy tests at Mitsubishi Motors, or the staff hiding a fatal airbag defect at auto parts giant Takata – may be due to “” Company loyalty, observers said.
“In other countries where there are missteps and failures in corporate governance, a lot of them are motivated by personal greed, self-interest of some sort,” Nicholas said. Benes, director of the Japanese nonprofit director training institute.
“This happens very rarely here. The most common case is when people think they are doing it in the best interests of the company – that is misplaced loyalty.”
This allegiance is closely linked to the meteoric rise of post-war Japan from a broken nation to the world’s second-largest economy. The employees asked no questions and devoted themselves to the success of the business in exchange for a job for life. These powerful ties have weakened over the decades as the economy deteriorated and companies laid off workers. But the structure of Japanese companies always puts a company’s reputation above all else, which sometimes leads to hiding facts, delaying announcements or trying to meet impossible demands from a superior, analysts said. .
“They tend to think that if this problem comes to light, it will lower the company’s stock price,” said a former Japanese government official who has worked on management and governance issues at business.
“What they are doing is actually damaging the credibility of the company. But they think they are acting for the good of the company,” added the former official, who asked not to be named.
Most large Japanese companies still hire college graduates right out of school and prepare them to stay for their entire careers.
Japanese companies are dotted with former bureaucrats in prominent positions in industries they once oversaw, though many have few relevant skills or are made to question management. In Toshiba’s case, an investigation into the 2015 accounting scandal found two former diplomats on its audit committee who fell short, amid a litany of other issues. In the process, Toshiba sold assets – including a medical device unit and most of its home appliance business – and laid off thousands of people. Now he’s in trouble again and has put his memory chip business on the line to raise funds. Japan adopted a corporate governance code almost two years ago that donors have hailed as a way to boost the confidence of foreign investors and avoid such scandals.