Toshiba's president and CEO Hisao Tanaka is stepping down after an investigative panel found that company executives were complicit in misreported earnings. The independent report said that Toshiba had exaggerated its operating profit by ¥151.8 billion ($1.2 billion) over the past six years. Vice chairman and former CEO Norio Sasaki is also out, and current chairman Masashi Muromachi will take over the role of interim CEO from tomorrow.

"Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors," found investigators. "Therefore, when top management presented ‘challenges,' division presidents, line managers, and employees below them continually carried out inappropriate accounting practices to meet targets in line with the wishes of their superiors." The committee did not find evidence that Tanaka or Sasaki issued direct orders to boost figures, but that they were aware of it and failed to take action.

"There was a corporate culture in which one could not go against the wishes of superiors."

The incident has shades of the scandal that hit fellow Japanese giant Olympus in 2011, when Michael Woodford turned whistleblower soon after becoming CEO and discovering evidence of widespread accounting malpractice. "If [Japan] fails to implement appropriate corporate governance, it could lose market trust," said Japanese finance minister Taro Aso earlier today. "It's very regrettable."