Olympus meets deadline for revised earnings report

AP News
Posted: Dec 14, 2011 7:31 AM
Olympus meets deadline for revised earnings report

Olympus Corp. submitted revised earnings reports Wednesday, meeting a deadline to avoid being removed from the Tokyo Stock Exchange. It still risks getting delisted later on because of an accounting scandal.

The piles of documents for the reports dating back five years were accepted by financial regulators three hours before the deadline expired.

The Tokyo bourse has the final say in deciding whether to boot out the once prestigious Japanese camera and medical equipment maker, and is still investigating the company's dubious accounting.

The deception at Olympus, dating back to the 1990s, to hide 117.7 billion yen ($1.5 billion) in investment losses came to light when former President and Chief Executive Michael Woodford blew the whistle, questioning expensive acquisitions and exorbitant fees for financial advice.

Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after confronting Olympus directors.

He returned to Japan this week to meet with investors and lawmakers and to try to lead a turnaround at Olympus. Last month, he visited to meet police and other investigators.

Woodford has said he wants to fix Olympus and has expressed hopes shareholders will back him. Woodford has also repeatedly said that he hopes Olympus will not be delisted.

Olympus did not have an immediate comment. President Shuichi Takayama has scheduled a news conference Thursday to go over the earnings filings. Olympus has said the cover-up losses were recouped over the years.

The company reported in its corrected documentation a loss of 32.3 billion yen ($414 million) for the first half of the fiscal year, through September, a reversal from a 3.8 billion yen profit the same period a year earlier.

Takayama, who took helm after the scandal broke, has said Woodford lacks the right teamwork style to lead the company, although now acknowledges the positive side of Woodford's whistleblowing. Olympus initially denied any wrongdoing and lambasted Woodford.

It is still unclear if Woodford will manage a comeback. Some people, such as former board member Koji Miyata, see him as a hero and have begun an online campaign to bring back Woodford. A date has not yet been set for a general shareholders meeting.

The scandal has prompted soul-searching in Japan Inc. on living up to global standards in governance.

Some experts say laws need to be updated, corporate boards needs more outside members and transparency needs to be strengthened. Ruling and opposition legislators met with Woodford to hear his ideas about better corporate practices.

No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.

A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were "rotten to the core" had orchestrated the accounting cover-up spanning three decades.

The fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company's books, according to Olympus.

Japanese magazine Facta was first to report the dubious money.

Tsuyoshi Kikukawa, who was behind Woodford's appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.

Last month, Olympus dismissed Executive Vice President Hisashi Mori, saying he was involved in the cover-up along with Kikukawa. A company auditor also resigned.

Olympus stock plunged after the scandal broke but has since recouped some of those losses. It slipped 4.1 percent to 1,314 yen in Tokyo on Wednesday.


Follow Yuri Kageyama on Twitter at http://twitter.com/yurikageyama