The Tokyo-based maker of displays said Thursday the money was lost at its Japan operations as the employee, who since has been fired, made the illicit payments over four years through October last year.
It apologized in a statement to shareholders, customers and other parties for the scandal.
A company spokesman said the company learned about the wrongdoing through a whistleblower and filed a criminal complaint in August.
Japan Display did not provide further details as an investigation continues.
The company was formed in 2012, when Japanese rivals Sony Corp., Toshiba Corp. and Hitachi combined their display operations.
It has racked up red ink for the last five years and has been seeking help from various backers including the government-supported Innovation Network Corp. of Japan,
Japanese electronics makers have often struggled in the rapidly changing display business, especially against the Korean giants Samsung and LG, as global demand has taken off for smartphones and other panel devices.
Japan Display has been a supplier to Nintendo and Sharp Corp. The company has more recently said it will focus on supplying the auto business as well as on the medical equipment and the IoT fields.
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