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2 Top Toshiba Officers Quit Over Soviet Sale

July 01, 1987|Associated Press

TOKYO — The two top officers of Toshiba Corp. resigned today, taking responsibility for a subsidiary's illegal sale of high-tech machinery to Moscow that helped the Soviets build quieter submarines.

Chairman Shoichi Saba and President Sugiichiro Watari announced their decisions at a news conference hours after the U.S. Senate voted to bar imports of Toshiba products for two years. (Story on Page 8.)

Saba said he and Watari will become consultants to the company.

News of the Senate action caused Toshiba shares to fall the equivalent of 16 cents today on the Tokyo Stock Exchange to $4.66. The ban must be approved by the House and President Reagan to take effect.

$2.76 Billion Sales

Toshiba's sales in the United States were estimated at $2.76 billion last year, including $344.8 million worth of semiconductors. Other products include color television sets, video recorders and personal computers.

"We have a big responsibility as the parent company," Saba said. "We feel responsible for having troubled society."

He said Toshiba Corp. had "nothing directly to do" with the sales by its Toshiba Machine subsidiary and denied the resignations resulted from the Senate action. However, he said, stepping down was "appropriate."

The two executives "feel gravely responsible for straining the already strained Japan-U.S. relations further," he said.

Quieter Submarines

Toshiba Machine is accused of selling eight sophisticated milling machines to the Soviet Union in 1982-84 in violation of Japanese trade rules that prohibit exports to communist countries of 178 strategic high-tech items.

U.S. officials say the machinery helped the Soviets fashion much quieter propellers for their submarines, thus making them harder to track.

Kongsberg Vaapenfabrikk, a Norwegian company, also has been implicated in the sales, which amounted to $17 million. In Oslo, Foreign Minister Thorvald Stoltenberg said that "sanctions and compensation claims are out of place in an allied partnership."

State Dept. Complains

In Washington, the State Department also expressed concern about the Senate action, saying it is "inappropriate for the United States government to seek compensation for actions of private firms in other countries."

Saba said he and Watari had considered resigning for some time, but the official decision was not announced until an emergency board meeting today.

"We will stay on as consultants," said Saba, who also is chairman of the Electronic Industries Assn. of Japan and vice chairman of the Federation of Economic Organizations.

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