Toshiba may add more outside directors after ac-counting
irregularities
TOKYO Toshiba Corp may appoint more outside board members to
improve oversight of its accounts which it is now investigating
after finding irregularities, its CEO said on Thursday.Toshiba has
not been able to close its books for the year that ended in March
as a third-part committee it hired probes its book-keeping
practices. It has said it likely overstated profits by around 54
billion yen ($436 million) in recent years.
The company has also skipped its year-end dividend to
shareholders, who an-grily challenged Chief Executive Hisao Tanaka
during an annual general meet-ing, which lasted for a record 3-1/4
hours.This is the biggest crisis in our 140 years of business,
Tanaka said, as several shareholders called on him and the board to
resign. To ensure this does not happen again, we are considering
the appointment of more outside directors and improving
governance.
Currently, a quarter of Toshibas current 16 board members are
independent. The company is due to hold an extraordinary
shareholders meeting in Sep-tember, when it may propose new board
members.
Tanakas proposal comes after Japan earlier this month adopted a
new corpo-rate governance code, which requires listed companies to
hire multiple outside directors and encourages companies to
prioritize shareholder returns.
These guidelines have also encouraged disgruntled shareholders
to speak out.Shares of Toshiba, whose businesses range from laptop
computers to nuclear power plants, have fallen about 15 percent
since the company disclosed the in-ternal investigation in
April.
Ive never seen Toshiba in such a state, said one shareholder,
who declined to be named. Everyone must quit.The third-party
investigation is expected to announce details on the
irregulari-ties by mid-July. Tanaka said it remained unclear when
Toshiba could resume dividend payouts.
People familiar with the companys plans have said it was
considering an ex-traordinary dividend to compensate for the missed
year-end payment.
