Toshiba’s shares are tumbling Monday morning after the company posted a massive loss, amid a major $1.26 billion accounting scandal.
The company revealed on Saturday that it posted a huge operating loss of 90.5 billion yen ($734 million) for the first half of the year.
The company also announced plans to sue five former executives — three former CEOs and two former CFOs — seeking 300 million yen ($2.4 million) in damages over alleged poor oversight that led to more than $1 billion in fake profits.
Analysts believe Toshiba announced its operating losses on the weekend to cushion the blow.
That plan didn’t work as great as Toshiba may have intended with shares down 7.5% on Monday in Tokyo. Company shares are down more than 40% year-to-date.
The financial results on Saturday were “a categorical disaster, with more skeletons coming out of this massive closet of theirs,” according to Bernstein analyst Mark Newman.
CEO Hisao Tanaka was forced to resign in July and other executives have since stepped down from the company.
Toshiba itself began investigating accounting practices in its energy division and the scandal grew in May, after the company said an independent committee would be taking over the review.
Eventually, the problem led Toshiba to cancel its year-end dividend and postponed earnings, prompting analysts to downgrade investment recommendations and earnings forecasts.