Toshiba blames former CEO for scandal

The head of Toshiba Corp.’s board of directors Osamu Nagayama apologized for and admitted there was an inappropriate exchange between the company and the industry ministry while blaming the former head of Toshiba, Nobuaki Kurumatani, for the scandal.

Nagayama said Kurumatani caused management turmoil and it is hard to ignore his responsibility.

Nagayama admitted there was a “lack of supervisory function” under his watch but that he would not resign due to the necessity for business continuity. He added that there was a lack of legal compliance and corporate governance on Toshiba's part and that he apologizes for creating a situation that worries and troubles people.

A third-party investigation revealed that Toshiba colluded with the government to lean on foreign shareholders.

Nagayama's comments were in response to the external report, which concluded that the company “did not fairly conduct” a general meeting of its shareholders last summer.

On June 13, Toshiba board members retired two directors from the board while excluding two other directors, Junji Ota, who heads the audit committee, and Takashi Yamauchi, a committee member, from the list of candidates for director.

The board also removed Masayasu Toyohara, a senior vice president, and Masaharu Kamo, a managing director, who had negotiated with the ministry, from their positions effective as of June 25.

Nagayama said the four disrupted Toshiba. He added that the conglomerate would establish a third-party panel to investigate the cause and determine responsibility.

The company is also set to hold an extraordinary shareholders meeting on June 25 and reshuffle its board members.