An independent panel of investigators is believed to have revealed one of the largest accounting scandals ever recorded in Japanese history.
Olympus, a Japan-based manufacturer of cameras and medical equipment, was found to have hidden $1.7 billion worth of losses since the early 1990s.
The company was allegedly covering losses it made after investments turned sour in Japan's stock crash nearly two decades ago.
The company faces greater consequences if it does not meet the December 14th deadline to submit its latest financial statements. Olympus could be delisted from the Tokyo Stock Exchange altogether should the deadline not be met.
Should the company be delisted, Olympus would lose all of its shareholder value in the company, which could potential result in its collapse.
The report uncovered what the investigators called a "rotten core" at the center of the company which had "infected those around it". The cover-up was thought to have been contained amongst a select few, with a variety of causes considered as to why the cooking of the books had escalated on such a large scale.
The panel credited Michael C. Woodford, Olympus' dismissed chief executive, for bringing the company's corruption to light. Woodford, who was fired in October, had raised questions about the firm's dubious transactions.
The panel had, however, dispelled allegations that some of the company's corruption extended to the Yakuza organised crime syndicate.
The panel was reassured to find no evidence of criminal connections, although the police continue their investigations into alleged involvements. Should there be any evidence of criminal connections, the company would be delisted from the Tokyo Stock Exchange immediately.
The six-member panel laid most of the blame at the feet of former executive vice-president Hisashi Mori, and former corporate auditor, Hideo Yamada.
It is thought that the losses were kept off the books for several years by the company's president at the time, Masatoshi Kishimoto, and former chairman Tsuyoshi Kikukawa continued the cover-up.
"As as a result, it is sad that a very limited number of top executives knew about it, and the board of directors and auditors did not work well," said chairman of the panel, Tatsuo Kainaka.
Current Olympus president, Shuichi Takama, issued an announcement on Olympus' official website apologising to shareholders for the scandal, and reassuring them that they will take appropriate action against those found responsible.
In the statement, he also promised timely and full disclosure of any new information. The committee's full report is available to read online.
The management of Olympus will present their formal response to the panel's findings later today.
Despite the fact that most of the blame is being attributed to former and retired employees of Olympus, there is likely to be just as much damage directed toward the companies current executives.
The committee had already recommended the dissolution of the current board. The Financial Times suggested that Shuichi Takama and his board of eleven step down immediately to open the way for reform.
It would certainly be in shareholders' interests to see the current board go out and a new board instated. But how far would it go towards reassuring business partners, shareholders and customers that their investments are safe?
Woodford said that he would be willing to return to his former position; although arguably such a move could be akin to drinking from a poisoned chalice at this delicate time in the company's recent history.
Olympus received an irreparable blow to their reputation with this scandal, and with their stocks already plummeting, the company will likely see further downturn in confidence over the next few days.
Should Olympus manage to make their December 14th deadline, the company still has to deal with the larger issue of how to salvage the company's reputation.
It is clear that the company's board will probably step down and follow the panel's recommendations. But what remains unclear is whether the fallout could extend to current president Shuichi Takama.
With authorities in the UK, the U.S., and Japan, all investigating the allegations of financial fraud held against Olympus, it would seem an impossible task to create a strategy to redeem confidence in the company. Even alleged ties to organised crime in Japan, however unproven, puts a black mark against their name.