November 21, 2011 / 11:12 PM / 7 years ago

Olympus ex-CEO Woodford says to attend board meeting

TOKYO/LONDON (Reuters) - The sacked chief executive of Japan’s disgraced Olympus Corp (7733.T) says he has accepted an invitation to attend its board meeting this week, in what could be a hopeful sign for investors who want him to return and lead a clean-up of the firm.

Olympus, a maker of cameras and medical equipment, has been engulfed by an accounting scandal and is under investigation by regulators, prosecutors and also organized-crime police. The scandal broke when CEO-turned-whistleblower Michael Woodford publicly questioned its accounts after his sacking last month.

“I was invited to the board meeting on Friday by Olympus and welcome the opportunity of going to Japan,” Woodford, a Briton, told Reuters in London on the eve of his departure for Tokyo, his first trip back to Olympus headquarters since his sacking at a board meeting just over five weeks ago.

Woodford has been cast by two major foreign shareholders as the best man to lead a clean-up of Olympus, which has lost about 70 percent of its market value since he went public with his concerns of improper accounting at the 92-year-old firm.

Olympus, which initially flatly denied any wrongdoing, has since admitted to hiding investment losses from investors for two decades and to using some of $1.3 billion in unusual merger and acquisition payments to help in the cover-up.

But a third-party panel appointed by the company to look into the accounting scandal has, so far, found no evidence that funds from its M&A deals went to organized crime syndicates or that “yakuza” gangsters were involved. The panel’s report is due in early December.

Woodford has cited unspecified security concerns for his decision to leave Japan in a hurry after he was sacked, but said on Monday he was now comfortable to return and reiterated his willingness to “go back and run” the company.

“I’m reassured about the security. The Japanese authorities are aware and arrangements have been made that I’m satisfied with,” the 31-year Olympus veteran said.

Woodford, who remains a director despite his sacking as an executive, would not discuss the agenda of the board meeting, saying only that it would be an opportunity to “ask my colleagues to do the best for Olympus.”


The scandal at the once-proud firm has rekindled concerns about lax corporate governance in Japan and revived worries about links between companies and organized crime.

A unit from the Tokyo Metropolitan Police Department’s organized crime division has joined the investigation, a source familiar with the matter said on Friday. But the source added it was premature to say if gangsters were involved.

Speculation has simmered since the scandal broke that the deals could be linked to “anti-social forces,” a euphemism in Japan for organized crime.

Olympus shares jumped 16 percent to close up their daily limit on Monday on speculation that the maker of cameras and endoscopes may avoid delisting despite the scandal.

The company risks being delisted from the Tokyo stock exchange over the scandal, but speculators who believe Olympus’ core medical equipment business still has value have been betting that executives responsible for the scandal will bear the brunt of any punishment.

Olympus has admitted to improperly accounting for M&A payments going back to 2006. A large share of these payments went to obscure Cayman Islands companies that have since closed, making it difficult to trace the money.

Tokyo prosecutors, who Japanese media said had questioned former Olympus vice-president Hisashi Mori on a voluntary basis on Friday, are expected to soon question the firm’s former president, Tsuyoshi Kikukawa, and internal auditor Hideo Yamada over their roles in the scandal.

The Tokyo exchange has placed Olympus on a watch-list as a possible prelude to delisting. If the firm misses a December 14 deadline for filing its financial statements for the six months to September, it will be automatically delisted.

Even if Olympus meets the deadline, the bourse can still delist the stock depending on the scale of its past financial misstatements or if the firm is found to have done business with organized crime syndicates.

Additional reporting by Kirstin Ridley in London and Lisa Twaronite in Tokyo; Writing by Mark Bendeich

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