For years, Toshiba, one of Japan’s best-known consumer electronics brands, had been a poster child of the country’s efforts to police corporate behaviour. The 140-year-old company even appeared as a case study in books on governance.
But what Seiya Shimaoka, an internal auditor at Toshiba, witnessed in late January was the opposite of exemplary behaviour. Instead, he saw the early signs of what would become one of the country’s most embarrassing corporate scandals, involving a company-wide effort to inflate profits by more than $1bn.
Mr Shimaoka repeatedly asked Makoto Kubo, head of Toshiba’s five-person auditing committee and a former chief financial officer of the company, to examine the accounts at its laptop business.
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