Japan's disgraced Olympus Corp is suing 19 current and former executives, including its current president, for up to almost $50m (£32m) in compensation, as it struggles to recover from one of the nation's worst accounting scandals.
The maker of cameras and medical equipment said all board members subject to the lawsuit would quit in March or April, leaving it in the extraordinary position for now of continuing with its most senior executive, Shuichi Takayama, and five other directors it is suing for mismanagement.
One analyst likened the current board to condemned men, resigned to their fate, and said they would have difficulty over the next few months making any strategic decisions, leaving Olympus more vulnerable to an eventual takeover.
"Essentially, everyone feels they are on death row. It does seem extremely strange to have the death-row cell inside the company," said Nicholas Smith, head of Japanese equity strategy at CLSA in Tokyo.
"Having nobody at the helm makes it easier for a takeover," he added.
Olympus shares surged as much as 28 per cent on the news, with investors betting the company's clean-up efforts would help it to avoid a humiliating delisting from the Tokyo Stock Exchange, in turn helping to ensure it stayed on bidders' radars. The stock ended up 20 percent.
Investors also looked forward to the eventual renewal of the board and to Olympus finally drawing a line under a $1.7bn accounting fraud which has thrown a spotlight on Japan's reputation for weak corporate governance.
City A.M. Reporter