Toshiba sues former executives over scandal, swings to operating loss

Japan's Toshiba Corp said on Saturday it has sued five former executives, including three former chief executives, over mismanagement, in an apparent attempt by the current leadership to distance itself from a $1.3 billion accounting scandal.

The laptops-to-nuclear power conglomerate also said it swung to an operating loss of 79.5 billion yen ($645.66 million) in the three months through September, from a 90.2 billion yen profit a year earlier.

The dismal results, which had been flagged this week, adds pressure on Toshiba to implement drastic restructuring steps that are long overdue as its profit-padding masked many unprofitable businesses.

"We're lagging behind in restructuring the unit in charge of personal computers, television and home appliances," Toshiba's chief financial officer, Masayoshi Hirata, told a news conference.

In a statement released at the news conference, Toshiba said it was seeking damages totalling 300 million yen ($2.44 million) from previous CEO Hisao Tanaka, his two predecessors and two former chief financial officers.

The lawsuit, filed with the Tokyo District Court on Saturday, was based on a report submitted by an independent panel investigating liability of 98 former and current executives for the overstatement of profits over seven years.

The panel of three lawyers concluded that the executives' negligence over dubious accounting practices caused damage to the company, Toshiba said.

The three former executives resigned in July, but denied any direct involvement.

They were not immediately available for comment.

Toshiba set up the independent panel in September after an individual shareholder demanded the company file a lawsuit for 1 billion yen in damages against 28 former and current executives.

It was Japan's worst corporate scandal since medical equipment maker Olympus Corp was found to have covered up $1.7 billion in losses in late 2011. Olympus sued more than 20 former and incumbent executives for damages.

Toshiba announced a plan to sell its imaging sensor business to Sony Corp in October, but a wide range of other loss-making operations remain untouched.