Olympus hid losses during two decades

 
City A.M. Reporter
JAPAN’S Olympus admitted yesterday it hid losses on securities investments dating back two decades, bowing to weeks of pressure to explain a series of baffling transactions that have put the future of the firm in doubt.

The revelations by the 92-year-old company seem to vindicate ex-CEO Michael Woodford, who has staged a campaign since being sacked on 14 October to force the firm to come clean on nearly $1.5bn in payments. Yesterday Woodford told the BBC that there was a “cancer in the boardroom” of Olympus. He said that the company had not done enough to get to the bottom of the affair. “Who has received the monies?” he asked.

Olympus president Shuichi Takayama blamed Tsuyoshi Kikukawa, who quit as president and chairman on 26 October, vice-president Hisashi Mori and internal auditor Hideo Yamada for the cover-up, saying he would consider criminal complaints against them. The admission shocked investors, sending shares in the camera maker skidding almost 30 per cent and prompting the biggest non-Japanese shareholder to demand the replacement of the entire board.

Olympus said it had found that funds related to its $2.2bn purchase of British medical equipment maker Gyrus in 2008, which involved a huge advisory fee of $687m, as well as payment of $773m for three tiny domestic firms, were used to hide losses on the securities investments.