Olympus meets deadline for revised earnings report
Wednesday, December 14, 2011
TOKYO (AP) — Olympus Corp. submitted revised earnings reports Wednesday, meeting a deadline to avoid being removed from the Tokyo Stock Exchange. It still risks getting delisted later on because of an accounting scandal.
The piles of documents for the reports dating back five years were accepted by financial regulators three hours before the deadline expired.
The Tokyo bourse has the final say in deciding whether to boot out the once prestigious Japanese camera and medical equipment maker. The company’s dubious accounting could result in a delisting.
The deception at Olympus spanning three decades to hide $1.5 billion in investment losses came to light when former President and Chief Executive Michael Woodford blew the whistle, questioning exorbitant fees and acquisitions.
Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after raising doubts about massive consulting fees for the acquisition of British medical equipment maker Gyrus Group in 2008 and other spending.
He returned to Japan this week to meet with investors and lawmakers and to try to lead a turnaround at Olympus. Last month, he visited to meet police and other investigators.
Woodford has said he wants to fix Olympus and has expressed hopes shareholders will back him. Woodford has also repeatedly said that he hopes Olympus will not be delisted.
Olympus President Shuichi Takayama has said Woodford lacks the right teamwork style to lead the company, although now acknowledges the positive side of Woodford’s whistleblowing. Olympus initially denied any wrongdoing and lambasted Woodford.
No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.
A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.
As of 2003, Olympus had racked up 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s, according to the company.
The fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, Olympus says.
Japanese magazine Facta was first to report the dubious money.
Tsuyoshi Kikukawa, who was behind Woodford’s appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.
Last month, Olympus dismissed Executive Vice President Hisashi Mori, saying he was involved in the cover-up along with Kikukawa. A company auditor also resigned.
Olympus stock plunged after the scandal broke but has since recouped some of those losses on optimism it might not be booted off the Tokyo Stock Exchange.