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Olympus recovers value as delisting threat fades
Source: Agencies |
November 15, 2011, Tuesday
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Print Edition
Print Edition
SHARES in Olympus rose by the maximum allowed in Tokyo yesterday on signs the scandal-hit maker of cameras and endoscopes may escape having its shares delisted.
A source said Japan's securities watchdog may recommend only a fine against the company, while proposing criminal charges be sought against the individuals behind dubious merger and acquisition deals used to cover up its huge investment losses.
But Olympus's bankers, due to meet company executives tomorrow, warned they would take action if the company was found to have used loans for anything other than their agreed purpose.
Investors are keen to ensure Olympus, caught up in one of corporate Japan's largest governance scandals, can continue operating its lucrative diagnostic endoscope business, which has a 70 percent share of the global market. That business makes about 70 billion yen (US$900 million) in operating profit, with profit margins of 19 percent.
The shares settled at 540 yen yesterday, up by the most allowed for one day, and up 17 percent from Friday's close. The stock, which had lost more than four-fifths of its value since the scandal broke, was untraded as buy orders overwhelmed offers to sell.
But there were warnings the buy orders may be driven by speculators.
Masayoshi Okamoto, head of dealing at Jujiya Securities, said: "If any investors are buying today because weekend media reports suggest Olympus might remain listed, that relief is premature and speculative at this point."
A source said Japan's securities watchdog may recommend only a fine against the company, while proposing criminal charges be sought against the individuals behind dubious merger and acquisition deals used to cover up its huge investment losses.
But Olympus's bankers, due to meet company executives tomorrow, warned they would take action if the company was found to have used loans for anything other than their agreed purpose.
Investors are keen to ensure Olympus, caught up in one of corporate Japan's largest governance scandals, can continue operating its lucrative diagnostic endoscope business, which has a 70 percent share of the global market. That business makes about 70 billion yen (US$900 million) in operating profit, with profit margins of 19 percent.
The shares settled at 540 yen yesterday, up by the most allowed for one day, and up 17 percent from Friday's close. The stock, which had lost more than four-fifths of its value since the scandal broke, was untraded as buy orders overwhelmed offers to sell.
But there were warnings the buy orders may be driven by speculators.
Masayoshi Okamoto, head of dealing at Jujiya Securities, said: "If any investors are buying today because weekend media reports suggest Olympus might remain listed, that relief is premature and speculative at this point."
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