Panel finds Olympus hid massive losses
Source: Agencies |
December 6, 2011, Tuesday
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Print Edition
Print Edition
AN investigative panel has found Japan's Olympus Corp hid up to US$1.67 billion in losses from its investors, but is likely to say there is no evidence of involvement by organized crime in the cover-up, a source said yesterday.
The panel will also stop short of recommending criminal charges against executives involved in the accounting scandal, presenting only the facts and leaving Olympus to pursue this aspect, said the source familiar with the panel investigation. "That is up to the company," the source said.
The panel's report is due to be released as soon as today, almost two months after Olympus's sacked chief executive, Englishman Michael Woodford, went public with his concerns over its dubious accounting for a series of murky acquisitions.
The maker of cameras and medical equipment has since lost more than half its market value and risks being delisted from the Tokyo stock exchange, a sanction that would cut it off from equity markets and put it under pressure to sell core assets.
But it may be able to avoid that humiliation if there is no proof of the much-rumored link between the cover-up and Japan's "yakuza" gangsters - and if Olympus can meet a December 14 deadline to sort its books and report its second-quarter results.
Olympus shares firmed 3 percent on the news, though investors remain nervous for not only the panel's official findings but also the outcome of a separate, joint investigation by police, prosecutors and the market regulator.
The source said the panel found that former executive vice president Hisashi Mori and ex-internal auditor Hideo Yamada had led the cover-up of losses, which amounted to 130 billion yen (US$1.67 billion) at its peak.
The panel has found Mori and Yamada then informed former president Tsuyoshi Kikukawa, the source added. Kikukawa at first publicly rejected the accusations of a cover-up when the scandal broke in October, but he later quit and the company conceded it had hid investment losses stretching back as far as two decades.
Current President Shuichi Takayama has said the firm is prepared to take legal steps, including filing criminal complaints, against those responsible for the cover-up.
The panel will also stop short of recommending criminal charges against executives involved in the accounting scandal, presenting only the facts and leaving Olympus to pursue this aspect, said the source familiar with the panel investigation. "That is up to the company," the source said.
The panel's report is due to be released as soon as today, almost two months after Olympus's sacked chief executive, Englishman Michael Woodford, went public with his concerns over its dubious accounting for a series of murky acquisitions.
The maker of cameras and medical equipment has since lost more than half its market value and risks being delisted from the Tokyo stock exchange, a sanction that would cut it off from equity markets and put it under pressure to sell core assets.
But it may be able to avoid that humiliation if there is no proof of the much-rumored link between the cover-up and Japan's "yakuza" gangsters - and if Olympus can meet a December 14 deadline to sort its books and report its second-quarter results.
Olympus shares firmed 3 percent on the news, though investors remain nervous for not only the panel's official findings but also the outcome of a separate, joint investigation by police, prosecutors and the market regulator.
The source said the panel found that former executive vice president Hisashi Mori and ex-internal auditor Hideo Yamada had led the cover-up of losses, which amounted to 130 billion yen (US$1.67 billion) at its peak.
The panel has found Mori and Yamada then informed former president Tsuyoshi Kikukawa, the source added. Kikukawa at first publicly rejected the accusations of a cover-up when the scandal broke in October, but he later quit and the company conceded it had hid investment losses stretching back as far as two decades.
Current President Shuichi Takayama has said the firm is prepared to take legal steps, including filing criminal complaints, against those responsible for the cover-up.
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