Two managers at post offices in Tokyo are suspected of embezzling some ¥540 million by privately selling used stamps earmarked for shredding, sources close to the matter said Thursday.

Japan Post Co., a unit of state-backed Japan Post Holdings Co., retrieved the cash and dismissed them in fiscal 2018, but had not disclosed the incident, the sources said.

The company found that an executive working at Kanda Post Office sold ¥400 million worth of stamps, while the second — employed at Shiba Post Office — had offloaded ¥140 million in stamps in the three fiscal years through March 2017.

The stamps had been used for postpaid mail, a service that is often sold at a discount to companies that want to pay upfront in stamps or cash for bulk mail.

They had been sold on by the two managers to discount ticket shops and are believed to have not been postmarked, the sources said.

In January this year, Japan Post stopped accepting stamps as payment for postpaid mail.

The Tokyo Regional Taxation Bureau has determined the cash received for the stamps is income that Japan Post failed to declare in the three fiscal years through March 2017, the sources said.

"It is true that there was inappropriate handling of stamps at Kanda and Shiba post offices," a Japan Post official said, adding the company is still investigating.

The misconduct has come to light as Japan Post seeks to regain public trust after it and Japan Post Insurance Co. admitted to inappropriately selling some 183,000 insurance policies. The Financial Services Agency conducted an on-site investigation in September.

The government is the biggest shareholder in Japan Post Holdings, a former state enterprise that was privatized in 2007.