New Olympus management to face critics at meeting

AP News
Posted: Apr 19, 2012 2:51 AM
New Olympus management to face critics at meeting

Michael Woodford, who blew the whistle on massive fraud at Olympus Corp., isn't optimistic about winning change at the shareholders' meeting set for Friday. But he hopes for a solid show of opposition against management from overseas investors.

Woodford has already conceded he won't be making a comeback at the Japanese camera and medical equipment maker, where he was chief executive until his firing in October after blowing the whistle.

Olympus has a solid lock over investor votes for approval of its proposed new management because of Japanese institutional investors, such as banks, and other support through a "cross-shareholding" system, in which companies own shares in each other.

But Woodford lambasted the shareholders meeting as a charade, and laughingly acknowledged he was an Alice in Wonderland figure in a corporate world of intrigue and orchestration.

"They know it's Kabuki," he told reporters Thursday at the Foreign Correspondents' Club in Tokyo. "It's business as usual."

Although it initially denied wrongdoing, Tokyo-based Olympus later acknowledged it hid 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s.

Olympus has appointed new management, including a former executive at Sumitomo Mitsui Banking Corp., Olympus' main bank, as chairman. The key executives suspected of engineering the deception have resigned.

Three former Olympus executives, including the company's ex-chairman, were arrested on suspicion of orchestrating the cover-up. The company has carried out its own investigation and is suing some executives for damages.

Woodford expressed doubts whether a banker can bring about change, and criticized the appointed president, Hiroyuki Sasa, head of marketing at the medical systems unit, as lacking experience in managerial leadership. He urged Olympus to appoint a majority of outside directors.

Woodford, a Briton and a rare foreigner to lead a major Japanese company, was fired in October after he went public with his doubts.

Woodford, who has recently written a book in Japanese about his whistleblowing, has become a celebrity in Japan as a champion of corporate governance. He expressed hopes he would get hired at a Japanese company.

Woodford, an Olympus shareholder, did not say what he planned to do at Friday's meeting. But he said he hoped more people would find out about his efforts at boosting transparency in the Japanese corporate world, and perhaps follow his example.

"You won't be bored," he said.

He warned that Olympus' practices were likely to discourage investment in Japan.

Olympus stock has plunged over the scandal. The company barely met its mid-December deadline to avoid being removed from the Tokyo Stock Exchange by filing corrected earnings for the April-September first half and for the past five fiscal years.


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