Former Olympus chief chief will see inquiry – but not in Japan

City A.M. Reporter
The former chief executive of Japan's Olympus signalled his willingness to meet investigators appointed to probe a scandal engulfing the firm, but he said he would not meet them in Japan due to safety concerns.

British-based Michael Woodford, whose sacking and revelations about irregular deals and payments triggered the scandal last month, said he would meet the company-appointed panel of investigators in London, New York or Singapore.

"I think there are security issues in relation to Japan," Woodford told Reuters in a phone interview.

He did not explain his concerns but the scandal has raised fears – denied by Olympus - that the deals could be linked to "anti-social forces", a euphemism in Japan for organized crime.

Olympus this week set up a panel of six men to probe M&A deals that have rattled confidence in the 92-year old company and wiped out half of its market value. The deals include the world's most generous advisory fee of $687m (£429m), mostly paid to an obscure Cayman Islands firm.

The panel's chief said earlier on Wednesday that it would need at least a month to report its findings and focus on the advisory fee, which was paid as part of Olympus's $2 billion purchase of British medical equipment maker Gyrus in 2008.

It would also scrutinize the acquisition of three companies in Japan that Olympus, under chairman Tsuyoshi Kikukawa's decade-long reign at the company, later largely wrote off.

Tatsuo Kainaka, a former supreme court justice who earlier this year headed a probe of Japan's No.2 bank, Mizuho Financial Group, told Reuters in an interview the panel had "a wealth of experience" to help it conduct the investigation.

In a sign of growing alarm that the scandal may hurt investor confidence in Japan as a marketplace, the ruling Democrats plan to set up their own panel to debate improving corporate governance and disclosure, a senior party official said.

Woodford, who says he was sacked for asking too many questions about the deals, is wanted for questioning by the panel, Kainaka said.

"We will seek the cooperation of Woodford," he said.

Olympus says it did nothing wrong and insists the Briton had to go because he was a poor manager.

A review in 2009 commissioned by Olympus' auditing board cleared management of misconduct in the now-controversial acquisition of the three Japanese firms.