The $1.2bn (£755m) accounting scandal at Toshiba has resulted in the resignations of its chief executive and a number of other senior staff.
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Reuters reported that owing to the investigation Toshiba has elected to suspend paying its year-end dividend.
The report said Tanaka and Sasaki, who were also successive presidents, had set operating profit targets that the heads of divisions were required to meet, applying pressure by hinting at withdrawing from areas that underperformed. The report is expected to chiefly describe how the irregularities occurred, including the institutionalized practice of overstating profits and management’s involvement, as well as the methods each business division used.
“Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors”, an internal report released Monday said, according to the BBC.
Toshiba made the announcement at an emergency meeting of directors on Tuesday.
The publication’s sources have claimed that Tanka is to resign from his position. Also exiting the company is vice-chairman Norio Sasaki.
The largest single earnings figure to be corrected is 85.8 billion yen of pretax profit in the 2012 fiscal year, according to the probe.
Goldman Sachs analyst Ikuo Matsuhashi suspended coverage of Toshiba this month because of the uncertainties, citing Westinghouse as a concern.
He added, “On behalf of Toshiba Corporation, I express honest apologies to our shareholders and all other stakeholders for any concern or inconvenience caused by this matter, and assure you that we will make every effort to restore your trust”.
The company initially uncovered irregularities related to “percentage of completion” estimates used on infrastructure projects, including nuclear, hydroelectric, wind-power equipment, air-traffic control and railway systems. Toshiba then appointed the third-party panel to expand the investigation to its visual products, PC and chip businesses.
The panel was led by Koichi Ueda, former chief prosecutor at the Tokyo High Public Prosecutors Office.
Nevertheless, investors appeared to have a positive outlook on the company as shares rose by 2.7%.
Toshiba has yet to release results for the year ended March 31, 2015.
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The firm said that it would take a look back at its old financial reports and adjust them accordingly.
