Tuesday, 10 November 2015

Toshiba share price drops by 7.5% after lawsuits

TOKYO— Toshiba Corp. shares fell 7.5% Monday after the company reported unexpectedly poor financial results and sued former executives in connection with an accounting scandal, raising the prospect of prolonged legal uncertainties.

The industrial and electronics giant surprised investors by announcing an operating loss of ¥90.5 billion ($733 million) for the latest six-month period on Saturday, an unusual time for a publicly traded company to report its financial results. A year earlier, Toshiba posted an operating profit of ¥137.9 billion.
Equally unusual was Toshiba’s disclosure that it had sued three former presidents and two other executives, seeking to recover ¥300 million in connection with the scandal. Toshiba has said it overstated profits by ¥155 billion over seven years, prompting the resignation of then-CEO Hisao Tanaka in July.
In the lawsuit, Toshiba accused Mr. Tanaka and the two other former chiefs, Atsutoshi Nishida and Norio Sasaki, of lax oversight. Mr. Nishida and Mr. Sasaki, who were still in other roles at Toshiba, also stepped down this summer in a broad shakeup of the company’s management and board.

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