Olympus ex-director rallies support for axed Woodford

A FORMER executive at Olympus has piled more pressure on to the board of the scandal-hit company by calling for the return of its ousted president and chief executive.

Koji Miyata has launched a campaign for the re-instatement of Michael Woodford (pictured), who was fired from the group after questioning a series of controversial payments that were eventually revealed to be hiding losses made on acquisitions.

It also emerged over the weekend that Olympus could face charges from Japan’s securities watchdog.

Miyata, a previous head of Olympus’ medical systems business who served as a director for 11 years, has posted online a 1,300 word message to workers in which he says Olympus’ endoscopic business is not indestructible and warns that the group’s future as an independent company is at stake.

“A lot of you are surely thinking, as I did initially, that ‘things will work out somehow.’ Friends, the Good Ship Olympus is listing and is in real danger of sinking.

“Partners and customers who have supported Olympus over the decades are beginning to abandon our company. Clearly, reinstating Michael as president and coming completely clean with the global community is the first step in revitalising Olympus.”

Last week Edinburgh fund manager Baillie Gifford also called for the re-instatement of Woodford, who is willing to return to his former job. He could not be reached yesterday but said in a message to supporters: “What an extraordinary letter from Koji Miyata. This is already having a tremendous impact in Japan.”

It came as sources said Japan’s Securities Exchange and Surveillance Commission (SESC) might recommend that a levy be imposed on the maker of cameras and endoscopes for making false financial reports, which could prevent the company from being delisted. A de-listing would enable Olympus to draw a line under the affair.

The SESC may, however, urge that criminal charges be sought against former executives and others involved in dubious merger and acquisition deals used for decades to hide large investment losses.

On Saturday GIC, Singapore’s sovereign wealth fund which had a 2.17 per cent stake as of the end of March, became the first major investor to show it had lost confidence in Olympus when it said it has sold most of its stake.

Politicians in Japan fear the fall-out from the scandal will hit the country’s other technology firms and last week Southeastern Asset Management, the largest foreign shareholder in Olympus, said delisting would harm foreign investment.

Sources said the SESC will make a final decision on its recommendations to the Financial Services Agency after seeing the results of a third-party panel investigating the case, as well as corrected versions of Olympus’ financial statements. The panel’s report is due in early December.

The SESC believes Olympus’ concealed losses, which could have exceeded 130 billion yen (£1.05bn) at their peak, were cleared by 2008 and that there is nothing wrong with the firm’s current financial position, according to Japanese media.

Police, prosecutors and regulators are believed to be joining forces in a rare collaborative effort to examine the cover-up while politicians are considering legal changes to tighten corporate governance controls.

14 October
Olympus fires British Michael Woodford, six months after he was made president and just two weeks after becoming chief executive, after he persistently asked why the company had spent around $1.3bn (£807.8m) on obscure fees and acquisitions. The company said it was due to management issues

20 October
Woodford requests police protection from Scotland Yard.

26 October
Olympus chairman Tsuyoshi Kikukawa resigns after criticising Woodford.

9 November
Baillie Gifford, the Edinburgh-based fund manager, calls for the reinstatement of Woodford. Investment manager Iain Campbell says Olympus’ current management is now discredited.

10 November
Tokyo’s stock exchange warns Olympus it will be de-listed after 62 years as a publicly traded company if it fails to report earnings by 14 December.

12 November
GIC, Singapore’s sovereign wealth fund, says it has sold most of its holdings in Olympus over concern about payments made by the group.

13 November
Sources say Japanese securities watchdog the SESC may recommend the imposition of a levy on Olympus for false financial reports.