Olympus sues current and former executives over accounting fraud

Japan’s disgraced Olympus Corp is suing 19 current and former executives, including its current president, for up to almost $50 million in compensation, as it struggles to recover from one of the nation’s worst accounting scandals.

The maker of cameras and medical equipment said on Tuesday all board members subject to the lawsuit would quit in March or April, leaving it in the extraordinary position for now of continuing with several directors it is suing for mismanagement.

The company’s share price, however, surged nearly 30 percent on the news, with investors looking forward to the eventual renewal of the board and to Olympus finally drawing a line under a $1.7 billion accounting fraud.

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Japanese prosecutors raid Olympus Headquarters

Japanese prosecutors raided the headquarters of Olympus Corp. and the home of its former president Wednesday as part of an investigation into the cover-up of massive losses at the camera and medical equipment maker.

A trail of dark-suited officials was shown on national television marching solemnly into the company’s downtown Tokyo office building.

Olympus said it would fully cooperate with the investigation by prosecutors, police and financial authorities.

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Japan police move on Olympus as investors demand clean-out

Japanese police have launched an investigation into the financial scandal engulfing Olympus Corp, a newspaper said on Thursday, as a major investor joined increasing calls for a wholesale clean-out of the board.

Tokyo Metropolitan Police are investigating the firm’s concealment of investment losses for possible violation of financial laws, the Yomiuri newspaper said, adding that police had asked Olympus for internal accounting documents and would also question Olympus executives and related officials.

Police would work with markets watchdog the Securities and Exchange Surveillance Commission, which is already investigating, and with Tokyo prosecutors, and swap information with the U.S. markets regulator and the FBI, the paper said.

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Olympus Admits use of acquisitions, deal fee to hide losses

Olympus Corp. said Tuesday that top executives used acquisitions to hide massive losses, reversing denials of any wrongdoing as one of the largest accounting frauds in Japanese history tarnishes the nation’s corporate image.

Tokyo-based Olympus, which makes cameras and medical equipment, has been battered by a scandal over a $687 million payment for financial advice and expensive acquisitions of companies unrelated to its mainstay businesses.

The company consistently denied any wrongdoing and sacked its chief executive last month after he raised concerns about the acquisitions and the payment to an obscure Wall Street firm.

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Woodford: In Japan, a foreigner speaks out

As he tucks his tie into his shirt and digs into a plate of Dover sole in a London restaurant, it’s hard to imagine that this down-to-earth 51-year-old Englishman is at war with one of Japan’s biggest corporations.

Woodford is taking on the leaders of Olympus Corp., one of Japan’s most venerable camera makers. He was made CEO of the company in early October. But two weeks later, on October 14, the board sacked him for what chairman Tsuyoshi Kikukawa said was Woodford’s failure to understand the company’s management style and Japanese culture.

Woodford says he was dismissed for questioning a series of odd-looking deals and hefty payments the company had made over the past half decade, including the biggest mergers and acquisitions fee ever.

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Olympus chairman quits; Japan watchdog probes firm

Olympus Corp head Tsuyoshi Kikukawa resigned on Wednesday after a scandal over hefty advisory fees wiped out half of the 92-year-old firm’s market value while his successor stuck with the company’s line that it had done nothing wrong.

Sources told Reuters that Japan’s securities watchdog was looking into past Olympus takeover deals, focusing on whether it has properly disclosed relevant information.

Olympus fired its British chief executive, Michael Woodford, on Oct. 14, just two weeks after his appointment as CEO, saying he failed to understand the company’s management style and Japanese culture. Kikukawa then took over Woodford’s role.

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Olympus case a black mark for Japan

The recent dismissal of the British chief executive of Olympus has once again drawn the attention of European media to peculiarities in corporate governance in Japan. Accounting practices and lack of transparency have aroused particular concern.

It seems strange that Michael Woodford should have been so summarily dismissed from his post as chief executive to which after many years service in the company he was only appointed some months ago. If, as members of the board are reported to have alleged, his style of management was incompatible with traditional Japanese practices it is odd that he was ever appointed to the top post. His qualities as a manager including his forthright attitude must have been known to the board when he was appointed.

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