Toshiba announced its chief executive and President Hisao Tanaka was resigning on Tuesday over accounting irregularities concerning $1.2 billion dollars, despite previous media reports saying he would step down in September.
The announcement came immediately after Japanese Finance Minister Taro Aso stated that the irregularities at Toshiba were “very regrettable.”
“If [Japan] fails to implement appropriate corporate governance, it could lose the market's trust," said Aso earlier on Tuesday, declining to comment on whether the company would face any financial penalty.
Tanaka will be replaced by Chairman Masashi Muromachi effective on Wednesday, the Toshiba announced. Toshiba's previous heads, Vice Chairman Noria Sasaki and adviser Atsutoshi Nishida, will also quit following the release of a third-party report on Monday.
According to the report, Tanaka was “skilfully” aware of $1.22 billion of overstated profits, three the company’s initial estimate, over several years.
Toshiba’s shares rose by 6 percent on Tuesday following the report, although the company’s value is still 23 percent lower than in early April when the irregularities were first disclosed.
Although the Japanese conglomerate has hired a third-party panel to investigate these irregularities, it hasn’t closed its books for the past financial year or suspended its year-end dividend.
Investigators mainly appear to believe that Toshiba’s executives resorted to understating costs and overestimating revenue to hide the impact of the 2011 Fukushima disaster on its nuclear division.