The ousted British CEO of Olympus Corp, who blew the whistle on a $1.7BN accounting fraud, dropped his bid to return to the medical device maker, blaming cozy ties between its scandal-tainted management and big Japanese shareholders and saying the saga had taken its toll on his family.
Michael Woodford's campaign against its management rocked the once-proud maker of endoscopes and cameras, but failed to win over Japanese institutional shareholders including Olympus' main lenders, who support a board that has been castigated for insufficient oversight.
"Despite my having done the right thing, none of the major Japanese institutional shareholders have offered one word of support to me," Woodford said in a statement.
The decision by Woodford, who was fired in October after just two weeks as chief executive, leaves foreign shareholders who want a new slate of directors, including U.S. fund manager Southeastern Asset Management, without a champion to lead any proxy battle when the company convenes an extraordinary shareholders meeting as early as March.
Woodford told a group of journalists on Friday that he would sue Olympus for unfair dismissal and had instructed his lawyers to begin legal action in Britain. Olympus said in October it was sacking Woodford because he had failed to understand the company's management style and Japanese culture.
"There are no grounds whatsoever for dismissal," Woodford said.
Woodford, who fled to England after his sacking citing unspecified safety concerns, said the trauma suffered by his wife after he went public with his campaign played a major part in his decision to drop his bid to return to Olympus.
"It's been a frightening period for my wife. I cannot put her through any more anguish," he said in his statement explaining why he was abandoning his battle to be reinstated.