Details Released Of Accounting Scandal at Olympus
A Japanese panel tasked with a probe of the accounting improprieties at camera manufacturer Olympus released details that paint a picture of an elaborate plan to hide $1.5 billion in investment losses. The details were credited to testimony from former Olympus CEO Michael Woodford, a British native that was relieved of his duty in October after questioning the several shady deals at the firm.
A third-party panel, led by a former Japanese Supreme Court judge, found that Olympus suffered 117 billion yen ($1.5 billion) in investment losses between the early 90s and 2003. Initially, Olympus denied it had engaged in any wrongdoing, but later admitted it had used a fake $687 million fee which it claimed to pay for financial advice on its acquisition of Gyrus Group to cover up losses from investments. The panel also found that the company's leadership inflated purchase prices on other acquisitions in regulatory filings to hide losses.
While the web of deceitful accounting was elaborate, the panel noted it had ruled out the involvement of organized crime, which had been speculated about in the Japanese media. The panel said it had been able to trace the cover ups, and found no evidence that underworld groups had been involved. Olympus officials acknowledged the seriousness of the panel's report, and said the company is considering measures to restore investor confidence in the firm, but noted that no new cover-ups had been discovered. Olympus President Shuichi Takayama has scheduled a press even for Wednesday to discuss the panel's report.
The panel identified six former Olympus officials, including the President, Vice President and a key auditor. The report also named several members of Olympus's board of directors, saying that they were aware of the cover ups that took place between 2006 and 2010, and recommended the resign from their posts, as well. Olympus is in jeopardy of being forced to delist, and some of the executives involved may face criminal charges in the case.