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Toshiba Nominates New CEO in Bid to Put Accounting Scandal Behind It

Toshiba Nominates New CEO in Bid to Put Accounting Scandal Behind It

By Reuters | Updated: 6 May 2016 18:35 IST

Japan's Toshiba Corp 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 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 (roughly Rs. 15,317 crores) writedown on US 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.

© Thomson Reuters 2016

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