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Exchange cautions Olympus of delisting
Source: Agencies |
November 11, 2011, Friday
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Print Edition
TOKYO'S stock exchange warned scandal-hit Olympus Corp yesterday it will be delisted after 62 years as a publicly traded company if it fails to report earnings by December 14, another blow to the Japanese camera-maker's chances of survival.
Olympus said it was unlikely to issue its earnings by next Monday, but it aimed to meet the later deadline.
The company admitted on Tuesday to a decades long cover-up of securities losses that is being investigated by authorities in Japan, Britain and the United States. Tokyo police will also look into the scandal, the Yomiuri newspaper reported yesterday.
The report said police had asked Olympus for internal accounting documents and it would question Olympus executives to determine if financial laws were violated.
The scandal has raised doubts about the outlook of the once-venerable maker of cameras and endoscopes, and experts said the firm's only future might lie in being taken over. But potential buyers would likely steer clear until the dust settles.
"Delisting does not mean it can't survive, or that it would definitely be forced to declare bankruptcy," said Hiroyuki Fukunaga, CEO of Investrust.
"It has lost a lot of capital but its businesses still have high value. Potential investors can't consider buying out the businesses until all of the investigations are complete."
Olympus stunned investors on Tuesday by revealing it had used M&A deals to hide securities investment losses that the Nikkei newspaper said may have exceeded US$1 billion.
Olympus has to delay its earnings announcement next Monday because its external auditor, Ernst & Young ShinNihon, will not have the information needed to sign off on the accounts, sources with knowledge of the matter said.
The auditor would want to wait for an independent panel to complete a review and the expected restatement of past earnings before signing off on its latest results, the sources said.
The Tokyo Stock Exchange said it had placed Olympus on a supervisory list and demanded the company report earnings by mid December or be delisted.
Supervision is designed to prevent short-selling of a stock, but such trading had already been suspended by Japan Securities Finance, the processor of margin transactions.
Lawyers said if the third-party panel found Olympus made material mis-statements in its accounts, delisting would be almost inevitable.
Olympus said it was unlikely to issue its earnings by next Monday, but it aimed to meet the later deadline.
The company admitted on Tuesday to a decades long cover-up of securities losses that is being investigated by authorities in Japan, Britain and the United States. Tokyo police will also look into the scandal, the Yomiuri newspaper reported yesterday.
The report said police had asked Olympus for internal accounting documents and it would question Olympus executives to determine if financial laws were violated.
The scandal has raised doubts about the outlook of the once-venerable maker of cameras and endoscopes, and experts said the firm's only future might lie in being taken over. But potential buyers would likely steer clear until the dust settles.
"Delisting does not mean it can't survive, or that it would definitely be forced to declare bankruptcy," said Hiroyuki Fukunaga, CEO of Investrust.
"It has lost a lot of capital but its businesses still have high value. Potential investors can't consider buying out the businesses until all of the investigations are complete."
Olympus stunned investors on Tuesday by revealing it had used M&A deals to hide securities investment losses that the Nikkei newspaper said may have exceeded US$1 billion.
Olympus has to delay its earnings announcement next Monday because its external auditor, Ernst & Young ShinNihon, will not have the information needed to sign off on the accounts, sources with knowledge of the matter said.
The auditor would want to wait for an independent panel to complete a review and the expected restatement of past earnings before signing off on its latest results, the sources said.
The Tokyo Stock Exchange said it had placed Olympus on a supervisory list and demanded the company report earnings by mid December or be delisted.
Supervision is designed to prevent short-selling of a stock, but such trading had already been suspended by Japan Securities Finance, the processor of margin transactions.
Lawyers said if the third-party panel found Olympus made material mis-statements in its accounts, delisting would be almost inevitable.
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