Japan's Olympus Corp. on Wednesday said it paid a whopping $687 million to financial advisers for its purchase of a U.K. company, confirming a key allegation made by CEO Michael Woodford who was fired last week after questioning the payment and other deals.
The total payment is equal to more than a third of the $2 billion that Olympus paid in 2008 for Gyrus Group Plc. Fees to financial advisers are normally just a fraction of that level. The company's statement contradicts its chairman Tsuyoshi Kikukawa, who a day earlier said the payment was about 30 billion yen ($390 million).
Woodford has said in media reports that his dismissal Friday was connected with his inquiries into the adviser payment as well as questionable acquisitions in Japan. He commissioned Pricewaterhouse Coopers to conduct an independent investigation, the results of which he distributed to the board of directors.
He had called for Olympus executives to resign a day before he was fired instead.
Olympus insisted that its decision to dismiss Woodford was not directly related to Woodford's calls for management to step down. Those demands represented "no more than another example of the numerous arbitrary actions taken by Mr. Woodford," it said.
The Tokyo-based company, which makes cameras and precision instruments, has blamed cultural differences for Woodford's removal and said his management style clashed with the company. The Pricewaterhouse Coopers report contains "a large amount of material that is based on supposition and speculation," Olympus said.
It did not disclose the identity of the financial adviser or explain why it paid so much for the services, defending the Gyrus purchase as strategically valuable and reasonably priced.
Olympus said that it is considering legal action against Woodford.
Woodford has reportedly already taken the matter to authorities. He met with the U.K. Serious Fraud Office, according to an interview he gave to the Financial Times. He also told the paper he would welcome legal action by Olympus.
Olympus shares have plummeted since Woodford was fired, first because of concerns about management. The selling accelerated as Woodford's allegations became known.
The company's share price has shed 44 percent over the last four trading days, wiping out some 300 billion yen ($3.9 billion) in its market value.
Woodford, a 51-year-old British national, was named Olympus' first non-Japanese president in April amid a push to make itself more globally competitive.