The Tokyo Stock Exchange announced Thursday that it has decided to delist Kanebo Ltd. on June 13 over a massive case of accounting fraud.

"We decided to delist the company after we found its fraudulent financial reporting was gravely damaging investors' trust in the stock market," TSE President Takuo Tsurushima told a news conference.

On April 13, Kanebo announced that an internal probe revealed that former management dressed up its earnings reports by a total of 200 billion yen over a five-year period beginning in fiscal 1999.

It said the revised reports showed the company had actually had a negative net worth during the period -- a condition that would have automatically led to delisting.

At the time of the announcement, the Industrial Revitalization Corp. of Japan, which is assisting in Kanebo's turnaround, said it was asking the TSE to keep the firm on the bourse.

Kanebo should not be punished, because the wrongdoing was committed by Kanebo's former management and the company voluntarily came clean about its past, the quasi-governmental bailout agency said.

Yet, given the length of the wrongdoing and the scale of the company's involvement, the bourse had no choice but to resort to the tough measure even though the company is effectively receiving public assistance, Tsurushima said.

In a separate news conference, Kanebo Chairman Yoshiaki Nakajima apologized to shareholders, but said the delisting would not affect its turnaround plan.

"We will actively pursue the development of new products in household, pharmaceutical, and food operations," he said.

Asked about whether the company intended to eventually go public again, Nakajima said that it would be a matter for future consideration.

He also repeated the company's plan to take legal action against former management.

Kanebo is the second major company to be ousted from the TSE in recent months.

In December, Seibu Railway Co. was kicked out after it was found the company had been falsifying shareholder records for nearly 50 years.