Auditors quit over Olympus payments

Kasmira Jefford
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KPMG, the auditors of the British medical equipment company at the heart of the Olympus scandal, quit last year over a series of mysterious payments made to the Cayman Islands.

Last week, Olympus’ former chief executive turned whistleblower Michael Woodford sent the technology firm’s share price plummeting after claiming he was fired after questioning $1.3bn (£815m) payments spent by the firm during acquisitions betwen 2006-2009.

Woodford discovered that one of the payments included a $687m fee to a Cayman Islands-registered company, AXAM for advice in connection to the $2.2bn acquisition of Gyrus in 2008.

It was revealed yesterday that KPMG resigned as auditors to Gyrus two years later after qualifying the firm’s accounts for the year to March 2009, citing discrepancies in the accounts.

In a resignation letter filed on Companies House in June 2010, KPMG said: “We consider that there are circumstances connected with our ceasing to hold office that should be brought to the attention of the company’s members or creditors.”

In the accounts, KPMG said it had not been provided with details of Axam “sufficient to enable us to form an opinion as to whether it is a related party... In our opinion, proper accounting records have not been maintained.”

Last week Woodford handed his findings to Britain’s Serious Fraud Office, which is considering launching an investigation. Olympus agreed on Friday to set up an independent committee to look into the scandal.