Toshiba reveals additional accounting irregularities, faces investigation by US authorities
We have reported on Toshiba Corporation's accounting irregularities in previous updates (most recently here). On 11 March 2016, Toshiba admitted that it had overstated past profits from the 2010 fiscal year by JPY 5.8 billion (US$ 51.30 million). This amount is in addition to a number of other downward revisions totalling JPY 224.9 billion (US$ 1.99 billion) that the company has disclosed following an independent investigation into its accounting practices. Toshiba stated that it had treated the additional errors as losses in financial reports for two quarters, but had not publically announced them as the amounts are below the required threshold for disclosure.
Toshiba said that it will "punish" 40 employees for the errors, in addition to the 26 employees who have already been disciplined. The company has previously sued five of its former executives, including Hisao Tanaka, Toshiba's former president and chief executive officer, for a total of JPY 300 million (US$ 2.65 million) for their involvement in these events.
The US Department of Justice and Securities and Exchange Commission are currently investigating several of Toshiba's US subsidiaries. This is the first investigation into Toshiba's accounting practices to be conducted outside of Japan. It comes after Japan's Securities and Exchange Surveillance Commission recommended a fine of JPY 7.37 billion (US$ 65.1 million) for Toshiba's overstated profits, the largest financial penalty it has ever sought to impose.
Olympus pays US$ 646 million to resolve US bribery probes
Olympus Corporation of the Americas ("OCA"), a unit of Olympus Corporation, will pay a US$ 312.4 million penalty and a US$ 310.8 million settlement to resolve a criminal complaint and associated civil claims filed by the US Attorney's Office of New Jersey and relating to kickbacks paid to doctors and hospitals in the US.
OCA admitted that it had won business from doctors and hospitals by providing them with grants, free equipment, consulting payments and personal travel.
OCA has entered into a three-year deferred prosecution agreement ("DPA") that will allow it to avoid prosecution if it adopts several compliance measures, including enhancing its compliance training programs, maintaining a confidential hotline and website for employees and customers to report wrongdoing, and requiring executives who engage in misconduct or who fail to promote compliance to forfeit up to three years of performance pay.
OCA's Miami-based subsidiary, Olympus Latin America ("OLA"), has also paid a separate US$ 22.8 million settlement and entered into a separate three-year DPA in relation to a different criminal charge concerning improper payments to health officials in Central and South America.