Toshiba Has Nominated a New CEO to Leave Its Accounting Scandal Behind

May 6, 2016, 10:46 AM UTC
Toshiba Corp. President Masashi Muromachi Attends Earnings News Conference
Masashi Muromachi, chairman and president of Toshiba Corp., attends a news conference in Tokyo, Japan, on Monday, Sept. 7, 2015. The manufacturer of chips and nuclear reactors released earnings on Monday after it delayed them last week on the discovery of new accounting irregularities related to a U.S. unit's construction project. Photographer: Kiyoshi Ota/Bloomberg via Getty Images
Photograph by Kiyoshi Ota — Bloomberg via Getty Images

Japan’s Toshiba said it had nominated Satoshi Tsunakawa, a former head of its medical equipment division, to be its next chief executive officer—a move that it hopes will draw a line under a damaging accounting scandal.

Sixty-year-old Tsunakawa, who was not embroiled in the scandal, is credited with having grown the medical equipment unit into a major profit driver. He is currently a senior executive vice president.

“My biggest task would be to rebuild trust from stakeholders and transform the company under our new action plans,” Tsunakawa told a press conference. “I would place the most immediate priority on beefing up the capital base.”

A $1.3 billion book-keeping scandal last year has pushed Toshiba (TOSBF) to streamline its businesses, announce plans for 14,000 job cuts and the sale of the medical unit to Canon Inc for $5.9 billion.


Shareholders Meet in June

Last month, it also took a $2.3 billion writedown on U.S. nuclear unit Westinghouse in a much-anticipated move to address lingering doubts over its accounting practices.

Tsunakawa’s appointment is expected to be confirmed at a shareholders’ meeting in late June.

Current CEO Masashi Muromachi took the helm last July when his predecessor and a slew of other senior executives resigned for their roles in the scandal, but had not planned on doing the job long term. He will become a special adviser.

Also on Friday, Senior Executive Vice President Shigenori Shiga was nominated to become chairman.

Shiga was chairman of Westinghouse when the unit booked charges of $930 million in fiscal 2012 and $390 million in fiscal 2013, which Toshiba failed to flag at the time in violation of the Tokyo bourse’s disclosure rules.

When asked about Shiga’s responsibility, the chief of Toshiba’s nomination committee, an outside board director, said his experience at the nuclear power business would be indispensable as the chairman’s roles include negotiations with the government and utility firms.

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