Fujitsu shares drop nearly 4% as its Europe chief says compensating Post Office victims is a 'moral obligation'

Shares of Fujitsu sank almost 4% on Wednesday after the Japanese IT firm's Europe co-CEO, Paul Patterson, said compensating those who suffered because of the company's faulty software was a "moral obligation."

The company, whose shares were the second-largest loser on the Nikkei index, signaled it would compensate hundreds of sub-postmasters wrongly prosecuted in the UK as a result of its defective software.

Between 1999 and 2015, 736 sub-postmasters, who are self-employed branch managers under contract to the Post Office, were subjected to prosecutions and financial misconduct convictions based on inaccurate data generated by Horizon, a software program made by Fujitsu.

This case received new public attention this year when ITV broadcast a drama series, "Mr Bates vs The Post Office," about the sub-postmasters fight for justice.

Horizon was manufactured by Fujitsu in 1999 and rolled out across Post Office branches to manage financial transactions. Complaints soon emerged that it was falsely reporting cash shortfalls.

Appearing before British MPs on the House of Commons Business and Trade Committee, Patterson said that "Fujitsu would like to apologize for our part in this appalling miscarriage of justice."

"We did have bugs and errors in the system and we did help the Post Office in their prosecutions of the sub-postmasters," he told the committee.

When Patterson was asked how much Fujitsu should contribute towards compensation, he did not give an exact figure, but said he expected to "sit down with the Government to determine our contribution to the redress" once the inquiry was completed.

The government has set aside 1 billion pounds in compensation for victims of the Post Office scandal.

Speaking to CNBC's "Squawk Box Asia,"