Olympus execs plead guilty in £1bn fraud trial

 
City A.M. Reporter
NESE

NESE camera and medical equipment maker Olympus Corp and three of its former executives pleaded guilty yesterday over charges related to a $1.7bn (£1.05bn) accounting cover-up in one of Japan’s biggest corporate scandals.

The scandal was exposed last October by chief executive Michael Woodford, who was sacked by the Olympus board after querying dubious deals later found to have been used to conceal the losses.

Revelations of the huge accounting fraud revived calls for more outside scrutiny of its boardrooms but have failed to trigger sweeping corporate governance reforms similar to those introduced a decade ago in the wake of US scandals such as at Enron.

“The full responsibility lies with me and I feel deeply sorry for causing trouble to our business partners, shareholders and the wider public,” ex-chairman Tsuyoshi Kikukawa told the Tokyo district court at the start of the trial nearly a year after the cover-up first came to light.

The indictment did not specify what penalties the prosecutors would seek, but lawyers have said the former executives could face up to 10 years in jail and fines of up to ¥10m (£79,000). The company could be fined more than ¥100m, according to Japanese media.

Also yesterday, sources familiar with the deal said rival Sony was likely to approve a plan this week to invest ¥50bn in Olympus, becoming its biggest shareholder with around a 10 per cent stake.