Japan's Supreme Court rejects Toshiba appeal against former executives

Japan's Supreme Court rejected Toshiba's appeal in a lawsuit seeking about 3.2 billion yen from five former executives over the accounting scandal discovered in 2015. The Second Petty Bench's decision, dated October 14, makes final a Tokyo High Court ruling that denied the former managers' liability and overturned the company's earlier partial victory. Nikkei reported that the decision was unanimous among the four judges. [ 1 , 2 , 3 , 5 ]

The disputed accounting involved understated loss provisions in infrastructure projects, inflated profits in the personal-computer business and delayed recognition of television-business expenses, Nikkei reported. Asahi said the scandal revealed that Toshiba had inflated profits by about 224.8 billion yen over roughly seven years. The Financial Services Agency imposed a penalty of about 7.3 billion yen for false securities-report statements, and Toshiba sought to recover part of that penalty and other costs from former executives, according to Asahi. [ 1 , 3 ]

The Tokyo District Court's March 2023 judgment found unlawful accounting only in the infrastructure business, Nikkei reported. It ordered damages against former executives for failing to stop or correct the treatment. The Tokyo High Court reversed that conclusion in March 2025. Nikkei said the high court acknowledged inadequate provisions in some projects but found no false statement on material matters in securities reports given the company's scale. Asahi said the high court also considered measures under discussion to avoid or reduce losses. [ 1 , 3 ]

Toshiba argued in its appeal that the high court lacked an understanding of accounting-book purposes, basic accounting rules and auditing practice, according to Nikkei. Asahi reported that the Supreme Court confined its decision to finding no qualifying appeal grounds, such as a conflict with precedent. [ 1 , 3 ]