Olympus delays results amid probe, faces delisting

AP News
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Posted: Nov 10, 2011 5:43 AM
Olympus delays results amid probe, faces delisting

Olympus Corp. said Thursday it is postponing an earnings announcement set for next week amid an accounting scandal that has wiped out about four-fifths of its stock price and tarnished Japan's corporate image.

The Japanese camera and medical equipment maker said in a statement Thursday that it cannot submit its earnings report for the April-September period on Nov. 14 as planned due to an ongoing review by a company-appointed investigation panel.

In response, the Tokyo Stock Exchange placed Olympus stock on supervisory status, warning that it could be removed from the stock exchange if it fails to release its earnings within a month, or by Dec. 14.

Olympus has been battered by a scandal over a $687 million payment for financial advice and expensive acquisitions of companies unrelated to its mainstay businesses.

On Tuesday, the company said top executives used the payment and acquisitions to hide massive losses, reversing denials of any wrongdoing. Its British CEO Michael Woodford first raised the concerns last month, calling for Olympus executives to resign _ and was then promptly fired by the board.

Olympus said it will do its "utmost" to submit the earnings report by Dec. 14, and said it was cooperating with the "strict and thorough investigation" being conducted by the independent committee. Results of the probe are expected in early December.

"We deeply apologize for causing trouble to our shareholders, investors, customers and anyone else who are affected by the matter," Olympus said.

The company's shares have plunged to 484 yen Thursday from 2,482 yen on Oct. 13, the day before Woodford's dismissal.

Olympus dismissed Executive Vice President Hisashi Mori on Tuesday, saying he was involved in the cover-up along with Tsuyoshi Kikukawa, who abruptly resigned as chairman last month in an attempt to placate angry shareholders.

Shuichi Takayama, who took over as president in late October, has said he can not disclose the size of the losses or any other detail because all data had been handed over to the independent panel.

The Tokyo-based company had denied wrongdoing over the $687 million payment to the Wall Street financial adviser as part of a $2 billion purchase of U.K.-based Gyrus Group Plc. The payment represented more than a third of the acquisition price. Fees for advisers are normally 1 to 2 percent of the deal value.

Business groups and analysts have said the scandal reflects weaknesses in Japan's corporate governance including too few independent directors on company boards.