Since then, Mr. Woodford has taken the decidedly non-Japanese step of publicly rebuking his employer and, by blowing the whistle on his own company, has done something rare for a chief executive anywhere in the world.
His allegations of billion-dollar malfeasance have set off investigations on three continents. Olympus has since acknowledged long-running efforts that it says were meant to hide steep financial losses. Now, Mr. Woodford is making his next unorthodox move.
On Friday he plans to return to Olympus headquarters for a board meeting, where he said he would demand that the entire board come clean on details of their actions and step down to take responsibility. (Because of a technicality, Mr. Woodford is still an Olympus director.)
He said he would offer to return to Olympus as president and lead a turnaround at the iconic Japanese company that some analysts and investors fear risks being delisted from the Tokyo Stock Exchange and could even be on the verge of collapse.
“I want to look them in the eye and talk to them directly,” Mr. Woodford said at an interview over dinner Wednesday in Tokyo, shortly after flying from London and being thronged by Japanese reporters eager to speak with the outsider who dared to speak up.
“I hope the company won’t be delisted, but I certainly wouldn’t compromise getting to the truth, because staying listed shouldn’t be the criteria,” he said.
Olympus’s taking Mr. Woodford up on his comeback offer might be a long shot. But hundreds of rank-and-file employees at Olympus have signed petitions urging the company’s top management to resign and calling for Mr. Woodford to return — a rare uprising in a nation that values company loyalty above all.
If he were reinstated, Mr. Woodford said, change at the company would be swift. And any housecleaning would include unwinding Olympus, a maker of medical imaging products and digital cameras, from the jumble of unrelated small businesses it acquired as part of the financial cover-up.
“The sooner you get out of the cat food and face cream and microwavable plates, the better,” he said. “Almost all of it, I would shut quickly.”
By challenging the Olympus board, Mr. Woodford — the first non-Japanese to lead Olympus in its 94-year history and one of few foreign chief executives in the country — will be confronting a closed, homogenous corporate culture that changed little through Japan’s freewheeling bubble economy of the late 1980s, the subsequent bubble-bursting in the ’90s and the national economic stagnation ever since.
Truly independent board members are rare in corporate Japan, and foreign ones are even rarer. Cozy cross-shareholding arrangements typically ensure compliant stockholders who tolerate mediocre management, or look the other way in cases of boardroom impropriety. And in a mixture of fact and myth, often lurking in the background of the Japanese business world are tales of corruption and rumored links to the country’s infamous organized crime syndicates, the yakuza.
In the case of Olympus, investigations by public officials in Japan and law enforcement agencies in the United States and Britain have focused on $687 million in advisory 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.
Article source: http://feeds.nytimes.com/click.phdo?i=b03eac5759354b3bd7d4605ba1ed536f
Speak Your Mind
You must be logged in to post a comment.