An independent panel has issued a damning report on a $1.7bn (£1.08bn) accounting scandal at Japan's disgraced Olympus, urging legal action against the executives responsible for the cover-up and the replacement of other board members who knew.
The six-man panel of experts found no link with organised crime, however, an outcome that may help the 92-year-old maker of cameras and endoscopes remain listed on the Tokyo stock exchange and survive a scandal that ranks among Japan's worst.
But the report failed to satisfy Olympus' ex-CEO Michael Woodford, who blew the whistle on the scandal after being fired.
"The core part of management was rotten and the parts around it were also contaminated by the rot," the panel said in its report, which was commissioned by the company and ran to more than 200 pages.
"In the worst possible sense, the situation was that of the tribal culture of the Japanese salaryman," it added, referring to a culture of absolute corporate loyalty.
The panel also criticised the external auditors who signed off on the books of the once venerable company.
Olympus has lost about half its market value since Woodford, an Englishman, was sacked in mid-October and went public with his concerns over murky accounting and some expensive and questionable acquisitions.
Speculation of "yakuza" gangster involvement had quickly surfaced as criminal outfits have a history of trying to extort money from Japanese companies by threatening to expose their secrets, and because Woodford had fled Japan, saying he feared for his safety.
Doubts persist over whether the panel, headed by a former Supreme Court judge, had the expertise or authority to dig into gangster involvement.
"That's really up to the police," said Jamie Allen, secretary-general of the Asian Corporate Governance Association, whose members include institutional investors who collectively manage assets of more than $10 trillion.
The panel blamed two former executives for cooking the books over 13 years to flatter the company's financial performance, and said three ex-presidents had known about the scheme.
It found no evidence to suggest any executives personally profited from the scandal.
"A factor in the longevity of the cover-up was the existence of external players who advised, helped and assisted in the concealment while knowing full well that such accounting practices were illegal," the report said.
It said the company as a whole was not involved, adding: "Olympus must take this opportunity to extract the tumour that centres around its former management group, and literally aim to renew its body and soul."
City A.M. Reporter