Toshiba Appoints Renewal Committee to Prevent Further Scandals

Toshiba Corp., emerging from an accounting scandal that may cost at least $1.2 billion in writedowns, appointed a six-member revitalization committee charged with preventing improprieties in the future.

Hiroyuki Itami, who currently serves as an outside board member at the company, will lead the group, Toshiba said in a statement on Wednesday. He will be joined by outside directors Ken Shimauchi, Kiyomi Saito and Sakutaro Tanino. An accountant and a lawyer will also join the group.

Toshiba has lost about $4 billion in market capitalization since May 8, when it withdrew forecasts and canceled the year-end dividend before later widening an accounting probe into construction projects to cover the entire company. President Hisao Tanaka, Vice Chairman Norio Sasaki and adviser Atsutoshi Nishida stepped down this month to take responsibility for Japan’s biggest accounting scandal since 2011.

Sasaki and Nishida were former presidents. No charges have been filed against Toshiba or executives.

The Tokyo-based company also said Mitsubishi Chemical Holdings Corp. Chairman Yoshimitsu Kobayashi and former Supreme Court Justice Yuki Furuta will act as observers, according to the statement.

The company also said eight executives will have their pay lowered by 40 percent for the three months from July while interim President Masashi Muromachi will take a 90 percent cut from August.

Toshiba is considering selling shares and properties to rebuild a balance sheet and reputation rocked by the accounting probe that revealed it inflated earnings by at least 156 billion yen ($1.26 billion) since the 2008 financial year.