THE RECOVERY effort at scandal-hit technology firm Olympus suffered another blow yesterday when a major shareholder advisory firm urged investors to reject the appointment of the proposed new chairman and president.
ISS Proxy Advisory Services said would-be president Hiroyuki Sasa lacked the right qualifications and Yasuyuki Kimoto, lined up to be head of the board, is too closely tied to Olympus creditor Sumitomo Mitsui Banking Corp (SMBC).
It also recommended the restated accounts be rejected at the shareholder meeting on 20 April.
The $1.7bn fraud (£1.07bn), which has shaken the conservative world of corporate Japan, is still subject to official investigations and ISS warned shareholders they could undermine any future lawsuit against Olympus if they accepted the restated accounts.
“Given the unusual circumstances surrounding Olympus, it would not be advisable for shareholders to support this proposal, which could interfere with their ability to file suit should the financial statements turn out to be inaccurate based on information yet to be revealed,” ISS said.
“There is no telling what may happen to Olympus, depending upon the outcome of investigations by public entities now under way.”
ISS is unlikely to win support from Japan’s institutional investors, but its report will boost the case of several Western funds, which have criticised the changes.
The current Olympus board is expected to resign en masse at next week’s meeting.