December 3, 2023

Olympus Board Hints at Quitting Over Fraud

At a news conference on Wednesday, Olympus said one director had resigned, others may follow and the entire board could go once the company submitted its second-quarter earnings, due by Dec. 14.

An external investigative panel report, released on Tuesday, concluded that several former executives spent 13 years running a complex scheme to hide huge investment losses. “Our corporate governance was severely criticized,” Shuichi Takayama, the president of Olympus, told reporters. “As the representative of the company, I apologize sincerely.”

The former chief executive, Michael C. Woodford, who was fired in October after questioning murky merger deals, is campaigning to return to lead Olympus, a 92-year-old Japanese maker of cameras and endoscopes. He has called for an extraordinary shareholders’ meeting to pick a new board.

Mr. Takayama, who took over after the scandal became public, said the earliest such a meeting could be held was late February, and the management would not resign before then — after picking its own slate of candidates.

“We don’t know what Mr. Woodford is thinking, but he has said he will pursue a proxy fight, so we think there will certainly be a proposal,” Mr. Takayama said.

“We will have the shareholders meeting decide,” he said. But he did praise Mr. Woodford for “pointing out problems that the current board failed to do.”

Olympus also set up an outside committee to advise whether to file criminal complaints or sue those responsible for the scandal, which has halved the value of the firm’s shares and fanned fears about Japan’s corporate governance generally.

Announcing the new committee, which is to report its recommendations by Jan. 8, the once-proud firm also said that a senior executive director, Makoto Nakatsuka, had quit the board, the third to do so since the scandal erupted.

Mr. Nakatsuka was found on Tuesday to have helped the two main architects of the cover-up — a former auditor and a former executive — to manage Olympus’s financial assets in the late 1980s, when it embarked on risky investments that led to the losses.

Olympus, which still risks being delisted from the Tokyo stock market and forced into a humiliating sale of core assets, said it would form a second external panel to examine the responsibility of the company’s auditors.

A report released Tuesday, prepared by outside legal and accounting specialists, said Olympus management was “rotten to the core,” ruled by a culture of absolute corporate loyalty and a desire to flatter financial performance.

Article source:

Speak Your Mind