Toshiba president and CEO Hisao Tanaka and several other executives and board of directors resigned over the accounting scandal confronting the company.

Toshiba

Yesterday, Toshiba disclosed that its independent investigation committee found that it needs to correct approximately $152 billion yen in its past financial results from 2008 to 2014. The senior management of the Japanese company systematically exaggerated its earnings over the past seven years, according to the independent committee. Toshiba’s accounting scandal is the most damaging that hit Japan in recent years.

The independent investigation committee said, “Inappropriate accounting was systematically carried out as a result of management decisions…betraying the trust of many stakeholders. In some cases, top management and division leaders appeared ti have shared a common objective to inflate profits.”

In a statement, Toshiba admitted, “There has been inappropriate accounting going on for a long time, and we deeply apologize for causing this serious trouble for shareholders and other stakeholders.”

Toshiba emphasized that it was taking the report of the independent committee “very seriously,” and it aims establish a new corporate culture under a new management and governance structures. The company added that it will make every effort to regain the trust of investors, shareholders, all other stakeholders and the public. The Japanese company is also asking for understanding and ongoing support.

Toshiba CEO said he did not order inappropriate accounting

Tanaka also expressed a “heartfelt apology” and bowed deeply to show his remorse on the issue during the company’s press briefing on Tuesday. He said, “This is the worst damage for our brand in its 140-year history.” Tanaka clarified, “I didn’t order inappropriate accounting.”

Toshiba Vice Chairman Norio Sasaki also stepped down from his position. Sasaki served as president of the company between June 2009 and June 2013. Most of the reported inflated earnings of the company happened during his tenure. Sasaki was not present at the press briefing.

The other Toshiba executives who resigned include corporate senior executive vice presidents and directors, Hidehiro Shimomitsu, Masahiko Fukakushi, Kiyoshi Kobayashi, Toshio Masaki and Keizo Maeda. Makoto Kubo, director and chairman of the audit committee and Atsutoshi Nishida, the adviser to the board also stepped down from their positions.

Masashi Muromachi, the chairman of the board of Toshiba, will serve as interim president and CEO starting on July 22. Executive officer and corporate senior vice president, Fumiaki Ushio will handle the daily business operations of the company. The board of directors of the company also appointed Hiroyuki Itami, an outside director as chairman of the audit committee.

Toshiba set up a management revitalization committee

Toshiba established a management revitalization committee following the report and recommendation of the independent investigation committee.

The management revitalization committee will focus on discussing a new management structure, reform of the governance structure, and measures to prevent the recurrence of accounting irregularities. Toshiba will appoint professionals as outside directors to provide advice on the matters.

Toshiba will also accelerate its focus and selection of business area and promote restructuring to improve the efficiency of its business. It will also take necessary precautions related to its financial planning by examining and implementing measures including the sale of several assets such as securities and real estates.