Company officers who were not directly implicated in a scheme to cover up past losses should not have to step down, Olympus’s president, Shuichi Takayama, told a press conference in Tokyo on Thursday, appearing to reverse an earlier promise to resign en masse. He also flaunted recent recommendations by a third-party investigative panel that called the management “rotten to the core” and urged the entire board to go.

The reluctance of Olympus’s current management to step aside has caused more investor jitters over the company, which booked a $1.3 billion reduction in net assets on Wednesday as it came clean on hidden losses
. The company also booked a net loss of 32 billion yen for the six months through September.

The big hit on its balance sheets has raised concerns that the company might be forced to sell assets or raise fresh capital, and the company may even be snapped up by rivals or funds, analysts said.

Olympus shares, which had trimmed losses in recent weeks, slumped more than 20 percent on Thursday.

“That is shareholder-repugnant. There’s no way they’re going to accept the current board staying on, particularly foreign investors,” said Nicholas Smith, a Japan strategist at CLSA Asia-Pacific Markets.

“At the moment, the only way they’re getting to vote is with their feet,” he said.

Olympus, the storied maker of endoscopes and cameras, admitted last month to hiding losses on investments in the 1990s with an elaborate scheme involving offshore funds, inflated acquisition payouts and a network of obscure brokers. The authorities on three continents are probing the company’s transactions.

Mr. Takayama said rebuilding the troubled company would require members of the current board to stay on. He said the company would call an extraordinary meeting of its shareholders in March or April, where some directors could seek reappointment.

“The current directors are imperative for a solid turnaround,” he said.

Mr. Takayama did not deny that he himself would stay on as president to lead those efforts. So far, only a few directors have quit after being implicated in the cover-up, including the former chairman and a former executive vice president.

Asked why the company would not follow recommendations made by the investigative panel, Mr. Takayama said he felt the guidance was open to interpretation.

“I think there is some wiggle room in whether or not everyone must be replaced at once,” he said.

He also said the company was considering capital tie-ups to shore up its balance sheet, though he offered no clues of possible partners or no further details of a turnaround plan.

It was unlikely, he added, that he or his colleagues could find a way to work with Mr. Woodford, who was fired unanimously by the board in October after blowing the whistle on Olympus’s past finances.

Mr. Woodford, a British national who was one of Japan’s few foreign chief executives, is now seeking a return to the company’s helm with a fresh slate of executives. He has said the existing board had been tainted in the scandal and has no right to choose its successors.

Mr. Takayama said he had no plans to meet Mr. Woodford, who is visiting Japan to rally shareholder support for his return bid. “Unfortunately, I have doubts about whether we can work together with Mr. Woodford,” Mr. Takayama said, citing what he said was a combative stance by the ousted chief executive.

Olympus’s frail finances and uncertainties over who will lead the company has undermined investor confidence even as it met a critical deadline Wednesday to announce its second-quarter earnings, clearing a major hurdle to staying listed on the Tokyo Stock Exchange.

The bourse, however, can still delist the 92-year-old company if it deems its transgressions serious enough – a weighty but potentially contentious decision, given past inconsistencies
by the Japanese authorities in metering out punishment for white-collar crime.

Rating Investment Information, the Tokyo-based credit research company, said Wednesday that it was slashing its rating of Olympus two levels to BBB-, just one notch above investment grade, with a view to a further downgrade. It said that equity capital had “eroded more than expected” and that there was a possibility of additional losses from shareholder lawsuits.

The company has withdrawn its earnings forecasts for this fiscal year, citing uncertainties ahead.

The verdict on who will lead Olympus will come down to shareholders. Southeastern Asset Management, Olympus’s biggest overseas shareholder, has insisted that the current board should go.

But some institutional investors in Japan have indicated they stand by Olympus, including Bank of Mitsubishi UFJ, one of Olympus’s largest lenders as well as a top shareholder in the company.

Mr. Woodford has said his own plans for Olympus, should he return, would be to build on investor confidence in fresh management at the company to recapitalize it. He said that he would not support an equity tie-up because that would rob Olympus of its independence.

At a press conference later Thursday, Mr. Woodford blasted Mr. Takayama’s intention to stay on.

“Should that man be the president and custodian of one of Japan’s iconic companies?” he said. “How dare he!”

“It would scare away investors all over the world,” he said.

Yasuko Kamiizumi contributed reporting.

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