Shares in Olympus fell as much as 30% on Tuesday after the company admitted to hiding losses on securities investments for decades.
The company said it had used funds related to past acquisitions to cover these losses.
This is the biggest disclosure Olympus has made since former chief executive, Michael Woodford, claimed that he was fired for raising questions about them.
Executive vice president, Hisashi Mori, has been dismissed as a result.
Olympus president, Shuichi Takayama, is blaming former president Tsuyoshi Kikukawa, former vice president Hisashi Mori and the company's auditor Hideo Yamada for the transactions.
"I was absolutely unaware of the facts I am now explaining to you," Mr Takayama said. "The previous presentations were mistaken."
He added that the company would consider criminal charges if necessary.
The controversy surrounds the payments made by Olympus to financial advisors as part of its acquisition of companies including British firm Gyrus.
The payments came to light when Mr Woodford claimed that he had been forced out of the company for raising questions about these and other accounting practices last month.
For its part, Olympus maintained that it had done nothing wrong and launched a third-party investigation into the matter.
"Through this process (of the third-party investigation), we found that from the 1990s the posting of losses on securities investments had been deferred," the company said in a statement.
The company also admitted that it had channelled money related to the acquisitions through various funds and other measures to defer posting losses.
After the company released the statement, Mr Woodford was quoted by the Reuters news agency as saying that "the position of the board and non execs is untenable now".
Keiji Isaji, an attorney with K&L Gates law firm in Tokyo added "the members of the board appear to have breached their fiduciary duty owed to the company and to the shareholders".
Olympus has seen its market value plummet by more than half since the scandal broke in October.
Analysts said the latest disclosure has raised questions about the very future of the company.
"This is very serious. Olympus admitted it has made false entries to cover its losses for 20 years. All people involved in this over 20 years would be responsible," said Ryosuke Okazaki of ITC Investment Partners.
"There is a serious danger that Olympus shares will be delisted. The future of the company is extremely dark," he warned.
Yukari Hozumi of the Tokyo Stock Exchange, where the company's shares are listed, told the BBC that it needed more information, such as the size of the deferred losses, before making any decision.