Toshiba CEO Hisao Tanaka resigns after $1.22 billion accounting scandal

Toshiba Chromebook 2 corner
Bad bookkeeping never ends well — it nearly got Greece kicked out of the European Union, and it officially cost Toshiba chief executive officer Hisao Tanaka his job. After an independent firm hired by the Japanese tech giant found that profits had been overstated by a staggering $1.22 billion, Tanaka, along with a slew of other executives, announced their resignation. Shin Ushijima, a lawyer and the president of the Corporate Governance Network, a watchdog group, told the The New York Times, “Toshiba has a 140-year history and was like a straight-A student when it came to corporate governance. Toshiba shares are in everyone’s pension plans. Executives’ responsibility is extremely heavy.”

According to the third-party investigation, employees who drastically understated costs on long-term projects and inventory that was improperly valued contributed to the enormous discrepancy in profits, amounting to a total of 151.8 billion yen between 2008 and 2014. In an internal investigation of their own, Toshiba also recognized that they’d overstated their gains, but by a much smaller margin (a third of what the outside hires found). As a result, eight of the 16 current board members are planning to leave the company, and it is expected that a few more will follow, leaving less than 50 percent of the existing board intact.

The magnitude of this scandal has raised serious questions about the legitimacy of the Japanese government’s recently implemented measures that were intended to better regulate corporate governance. Last month, Prime Minister Shinzo Abe instituted a new requirement for publicly traded companies in Japan to maintain a minimum of two external, independent directors on their boards. But Toshiaki Oguchi, a governance expert who helped the government create the guidelines pointed out, “Toshiba satisfied the formalities of the code, but not the quality.”

Now, the biggest question at hand concerns how the company will move forward and overcome this series of setbacks. Damian Thong, a senior analyst for Japan technology at Macquarie, told CNBC, “Toshiba really has spent the last 20 years trying to grow first in electronics, and then when that failed, to go back and try to grow its power systems business. Growth is at something of an impasse at the moment, with both areas running into problems.” And whoever is chosen to solve those problems will have his or her work cut out for them.

“Whoever comes in will have to really bring the morale of the company back up and really fight harder in the real markets outside,” Thong said. “This is a big challenge for them, and I don’t think it will happen overnight.”

DT Daily

Microsoft has #*!@ed up to-do lists on an epic scale

Microsoft has mucked up to-do lists on a scale you simply can’t imagine, a failure that spans multiple products and teams, like a lil’ bit of salmonella that contaminates the entire output from a factory.
Gaming

Feeling nostalgic? Here are the 25 best Sega Genesis games

Although the company has since fallen into obscurity, Sega was an indisputable titan throughout the '90s. That said, here are 25 best Sega Genesis games that helped define its fabled decade.
Movies & TV

The best movies on Amazon Prime right now (November 2018)

Prime Video provides subscribers with access to a host of fantastic films, but sorting through the catalog can be an undertaking. Luckily, we've done the work for you. Here are the best movies on Amazon Prime Video right now.
Movies & TV

The best shows on Netflix, from 'The Haunting of Hill House’ to ‘The Good Place’

Looking for a new show to binge? Lucky for you, we've curated a list of the best shows on Netflix, whether you're a fan of outlandish anime, dramatic period pieces, or shows that leave you questioning what lies beyond.
Home Theater

The best movies on Netflix in November, from 'The Witch’ to ‘Dracula’

Save yourself from hours wasted scrolling through Netflix's massive library by checking out our picks for the streamer's best movies available right now, whether you're into explosive action, witty humor, or anything else.
Mobile

Apple reportedly chooses Intel to supply the modem for the first 5G iPhone

While some reports hinted that Apple was looking to move away from using Intel tech, a new report suggests the exact opposite. Reportedly, Apple has chosen Intel to supply 5G modems for Apple's first 5G-enabled iPhone, due in 2020.
Outdoors

GM is getting into ebikes, and it wants you to help name them

General Motors has just unveiled its first-ever electric bikes and has launched a $10,000 public contest to help name them. Tip: It's probably not worth suggesting "Bikey McBikeface."
Smart Home

No, Amazon Day isn’t yet another shopping event, but you may find it useful

Don't worry, Amazon Day isn't yet another online shopping extravaganza aimed at wrecking your monthly budget. Instead, it's a delivery option being tested for Prime Members that could actually be pretty useful.
Outdoors

Lime splashes $3 million on a campaign to encourage safer electric scooter rides

Keen to boost its image and keep local communities onside, scootersharing outfit Lime is spending $3 million on a campaign to teach its users how to ride more safely and responsibly.
Social Media

Facebook opens pop-up stores at Macy’s, but they’re not selling the Portal

Facebook has opened pop-up stores at multiple Macy's, though they're not selling Facebook's new Portal device. Instead, they're showcasing small businesses and brands that are already popular on Facebook and Instagram.
Smart Home

Amazon sends out physical toy catalog for kids of all ages this holiday season

Amazon confirmed it is shipping a printed holiday toy catalog, "A Holiday of Play," to millions of customers starting in November. The 68-page catalog has QR codes for many toys. A downloadable version links to each product on Amazon.
Mobile

Google confirms it will add Android support for foldable displays

It's already clear a few smartphones of 2019 will be foldable, and Google is embracing the trend. The company announced its adding Android support for foldable devices, which will allow apps to work seamlessly with the new form factor.
Mobile

Rugged Cat phones look to crack U.S. market through new deal with Sprint

The biggest name in rugged smartphones is launching a new device in the U.S. with Sprint. The Cat S48c is a tough, but affordable phone that can handle drops, water, dust, and extreme temperatures.
Cars

Bosch, Daimler team up to deploy autonomous Mercedes-Benz S-Classes in San Jose

In 1986, when Bosch and Daimler joined an autonomous car research project, the technology seemed overly futuristic. Now, the partners are aiming to make a production self-driving car by the early 2020s.