Ahead of Woodford Meeting, 3 Olympus Executives Resign

The company said that three senior executives who had previously lost their roles had already resigned from the board and from the company entirely.

The moves were a compromise ahead of what was expected to be a tense showdown between Mr. Woodford and the Olympus management in the meeting on Friday.

In a statement signed by President Shuichi Takayama, the company provided no time frame but said the board had no intention of resigning before pulling Olympus back from a crisis that has raised concerns that the company’s shares might be delisted from the Tokyo Stock Exchange.

A delisting would erase all shareholder value, constrain the company’s access to capital and cloud the company’s future as a going concern, analysts have said.

Mr. Woodford was fired by Olympus last month over what the company characterized as a management culture clash. But Mr. Woodford said he had been dismissed after he raised questions about $1.4 billion in payouts related to mergers and acquisitions of obscure recipients.

Mr. Woodford said that the Olympus board, which had been aware of the questions he raised, was discredited and should resign.

Olympus later acknowledged that those payments, made from 2006 through 2008, were part of an effort to cover up losses on past investments.

Behind the plan, the company said, were Tsuyoshi Kikukawa, who stepped down as chairman last month, and Hisashi Mori, who was dismissed as executive vice president. The corporate auditor, Hideo Yamada, also implicated in the cover-up, submitted his resignation as well.

The three executives who resigned will not attend the board meeting on Friday, Olympus said. Mr. Kikukawa, Mr. Mori and Mr. Yamada, the company added, would continue to cooperate with an investigation by a committee of legal experts appointed by Olympus.

Mr. Woodford, a British national, has offered to return to the company to lead a turn-around. He arrived from London late Wednesday and on Thursday met with Japanese financial regulators, prosecutors and the police, who are investigating the scandal.

Olympus did not address whether the company would accept Mr. Woodford’s offer.

Under scrutiny are $687 million in fees paid in 2008 to an obscure financial adviser for Olympus’s acquisition of the British medical equipment maker Gyrus — fees equal to roughly a third of the $2 billion acquisition price and more than 30 times the going rate.

Olympus also acquired three small Japanese companies from 2006 to 2008 with little in common with its core business for a total of $773 million, only to write down most of the value of each within the same fiscal year it was acquired.

Law enforcement agencies in the United States and Britain are also investigating the case.

In Japan, officials are looking at whether money flowed to companies with links to organized crime.

Article source: http://www.nytimes.com/2011/11/25/business/ahead-of-woodford-meeting-3-olympus-executives-resign.html?partner=rss&emc=rss