Toshiba is suing five executives as the scandal-ridden company tries to recover from accounting irregularities and financial misstatements, which led to inflated profits by more than 170 billion yen (US$1.2 billion). The Tokyo-based company said in a statement that it is suing two of its former chief financial officers and three former presidents, Hisao Tanaka, Norio Sasaki and Atsutoshi Nishida as the firm seeks 300 million yen ($2.44 million) in damages.
The lawsuit was filed on Saturday with the Tokyo District Court, and was based of findings from a report submitted by an independent panel, which is investigating 98 former and current executives for doctored books that led to inflated profits.
A report on CNBC said that the independent panel that consisted of three lawyers found that the executives’ negligence over false accounting practices caused significant reputational and financial damage to the company.
In September, Toshiba launched an independent panel after an individual shareholder called for the company to file a lawsuit for 1 billion yen in damages against current and former executives.
Toshiba’s accounting debacle has since been dubbed one of Japan’s worst corporate scandals after Olympus was found guilty after a whistleblower came forward about the medical equipment maker’s falsified statements that concealed up to $1.7 billion in losses in 2011.
As Compliance Week previously reported, Toshiba hired a third-party to investigate previous bookkeeping policies and practices that led to overstated profits. Investigators are focusing the probe around key board members who may have encouraged the unethical behavior for several years.
In April, the company disclosed accounting irregularities after Japan’s financial watchdogs inquired about reports on past bookkeeping procedures. This occurred after one of its medical subsidiaries in 2013 overstated results for many years.