Japanese Finance Minister Taro Aso said accounting irregularities at Toshiba Corp (6502.T) were “very regrettable”, coming at a time when Japan is trying to regain global investors’ confidence with better corporate governance.

“If (Japan) fails to implement appropriate corporate governance, it could lose the market’s trust,” Aso told a news conference on Tuesday. “It’s very regrettable.”

A report by independent investigators released on Monday said Toshiba had overstated its operating profit by 151.8 billion yen ($1.22 billion) over several years, roughly triple Toshiba’s initial estimate. President and Chief Executive Hisao Tanaka and his predecessor, Vice Chairman Norio Sasaki, were aware of the overstatement of profits, it said.

Aso declined to comment when asked if Toshiba would face any kind of financial penalty. Sources have said regulators were beginning their own review of Toshiba’s book-keeping, based on Monday’s report.

The investigation came just as Prime Minister Shinzo Abe has implemented new guidelines to improve the country’s corporate governance. This is Japan’s biggest business scandal since camera and medical equipment maker Olympus Corp’s 13-year cover-up of $1.7 billion (784 million pounds) in losses blew up in late 2011.

Sources have said Tanaka and Sasaki would resign in the coming months and most of the board would be replaced to take responsibility for the shortcomings.

Shares in Toshiba rose 4 percent by midday on Tuesday on relief the report had few nasty surprises. But they were still down around 24 percent since Toshiba first disclosed cases of accounting irregularities in early April.

“Institutional investors and other long-term funds have already unloaded Toshiba shares, so currently the stock price is being driven by short-term investors,” said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.

“The bad news is out. As long as Toshiba won’t be delisted, such trade will continue.”

(Reporting by Tetsuji Kajimoto, Ayai Tomisawa and Chang-Ran Kim; Editing by Richard Pullin and Rachel Armstrong)

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