Toshiba CEO resigns over $1.2 billion accounting scandal

Eight board members, including vice chairman Norio Sasaki, have also resigned their posts as part of a major management reshuffle. Toshiba's current chairman, Masashi Muromachi, was named interim president.

Japanese conglomerate Toshiba (TOSBF), which makes everything from consumer electronics to nuclear energy technology, has been under fire for months over accounting irregularities. The company overstated profits by 151.8 billion yen ($1.2 billion) over a seven year period, according to an independent committee.

"We are taking what has happened very seriously and we would like to apologize from our hearts to, starting with the shareholders, and to all the stakeholders," Tanaka said at a news conference, announcing his resignation.

The company said in a letter to investors Monday that it would "take procedures to correct past financial results as necessary."

The headache started in April, when Toshiba itself began investigating accounting practices in its energy division.

Things got worse in May, after the company said an independent committee would be taking over the review. Toshiba even canceled its year-end dividend and postponed earnings, prompting analysts to downgrade investment recommendations and earnings forecasts.

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Shares of Toshiba have dropped around 20% since early April when the accounting issues came to light. The company's market value is hovering around 1.673 trillion yen ($13.4 billion).

Full-year earnings are due on August 31, and analysts at Bernstein expect Toshiba's stock to continue to drop.

Toshiba was founded in 1875, and quickly made a name for itself introducing technological advancements in Japan from electric washing machines to refrigerators, and later, the world's first color TV. It's now one of the world's most recognizable consumer electronics brands.

News Courtesy: www.cnn.com