Toshiba launches lawsuit against former CEO

Legal action brought against five former execs including former CEO Hisao Tanaka

Toshiba is launching legal action against five former executives over financial mismanagement in the wake of an accounting imbroglio earlier this year.

The Japanese giant said it is seeking damages of ¥300m (£1.6m) with five of its former top brass, including its former chief executive Hisao Tanaka, who resigned in July following a probe into accounting procedures.

The announcement comes after the findings of an investigation committee led by "outside legal experts", who found that the quintet "have been negligent".

The revelations concerning the accounting scandal, which found the vendor overstated profits of ¥151.8bn over the past seven years, prompted an analyst in July to speculate it might exit the PC market.

Toshiba also released its financial results yesterday, which showed for the six months to 30 September, it made an operating loss of ¥90.5bn, compared with a profit of ¥115.1bn in the same period last year. This was on sales of ¥2.9tr which were down from ¥3.1tr in the same period last year.

However, Toshiba said its European performance, including the UK and Germany, was quite strong.

"In the first half of FY2015 (April-September), the US and UK economies witnessed a solid performance on the whole, and the Eurozone economy, especially the German economy, saw a moderate growth," a statement from the firm said. "On the other hand, the Chinese economy experienced a growth slowdown as it adjusted to oversupply and sought to transition from an investment-driven to consumer-driven economy."

The company's electronic devices and components business made an operating profit of ¥38.8bn down from ¥106.7bn in the same period last year. This division saw its sales down by three per cent year on year at ¥821.5bn.

The firm attributed this to lower sales its storage business.