The CEO of Japanese electronics firm Toshiba quit today in the wake of an independent report which confirmed the company inflated profits by $1.22 billion. But one leading expert believes all the financial "bad news is out."
Hisao Tanaka’s position was widely seen as being untenable after the report published on Monday concluded senior executives colluded in "institutional" accounting malpractices over seven years.
"Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors," stated the report.
It inflated its profits three-fold, investigators found.
Toshiba is now braced for fines, a full management and board overhaul, and a turbulent time at the hands of investors.
That said, its shares rallied by 6 per cent upon publication of the report, but the company has lost 17 per cent of its value since the accounting alarm was first raised in May.
"Institutional investors and other long-term funds have already unloaded Toshiba shares, so currently the stock price is being driven by short-term investors," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.
"The bad news is out. As long as Toshiba won't be delisted, such trade will continue."
Chairman Masashi Muromachi is replacing Tanaka. Vice-chairman Norio Sasaki is also leaving the company.