Toshiba ditches Kone elevator biz for $943m

Toshiba (TYO:6502) today said it closed a deal worth nearly $943 million for its Kone Corp. elevator and escalator business, as it looks to recover from a $1.2 billion accounting scandal that’s already claimed it senior management team.

The Japanese conglomerate said the €35.75-per-share deal, valued at €864.7 million, is expected to yield profits of about $102.9 million (¥113 billion).

That will no doubt come in handy as Toshiba looks to right itself after an independent inquiry found that it inflated its profits by $1.2 billion over a period of several years.

The scandal, Japan’s largest since Olympus (TYO:7733) nearly imploded in 2011 over its $1.7 billion foofaraw, resulted in the resignations of CEO Hisao Tanaka and a string of other senior Toshiba executives. Tanaka will be temporarily replaced by chairman Masashi Muromachi after an independent inquiry found the CEO had been aware the company had inflated its profits by $1.2 billion over a period of several years.

Tanaka’s predecessors as presidents of the laptops-to-nuclear conglomerate, vice chairman Norio Sasaki and adviser Atsutoshi Nishida, will also step down after the 3rd-party report showed they played a part in the overstatement of profits going back to the 2008 financial year.

Tanaka and Sasaki pressured business divisions to meet difficult targets and knew they were overstating profits and delaying the reporting of losses, amid a culture of not going against the wishes of superiors, the report said.

In March, agreed to pay as much as ¥11 billion ($92 million) to resolve 2 civil lawsuits arising from a 2011 accounting scandal at the maker of cameras and medical imaging equipment.

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