Olympus admits to concealing losses
Tuesday, November 08, 2021 2:07 PM

Japan's Olympus Corp. released a statement that an independent panel had found that the company had covered up losses on investments since around the 1990s. The revelations sent Olympus shares plunging 29 percent to 734 yen on the Tokyo Stock Exchange.

The stock has lost 70 percent of its value since Michael Woodford was fired as CEO on Oct. 14. After being axed, Woodford raised his concerns over $687 million paid to a Wall Street financial adviser in the $2 billion acquisition of U.K. medical-equipment company Gyrus Group Plc in 2008. 

The company also spent 73.4 billion yen to acquire three unlisted Japanese companies from 2006 to 2008. It reported an impairment loss of 55.7 billion yen during fiscal 2009.

 The Tokyo-based maker of camera and endoscopes said Tuesday that three executives helped hide decades of losses by using funds related to its series of acquisitions. A series of fees, including acquisition funds, has been used to resolve such deferral in the posting of these losses, the company said in a statement.

Olympus said it has dismissed Executive Vice President Hisashi Mori, who was found to be involved in such deferral in posting of the losses along with Tsuyoshi Kikukawa, who abruptly resigned as chairman last month amid increased pressure from investors for a review of the deals. Hideo Yamada, the company auditor, is also considering resigning, it said.

"It is a fact that we carried out inappropriate accounting," said Olympus president Shuichi Takayama, at a press conference in Tokyo.

The U.S Federal Bureau of Investigation is also reportedly investigating the allegations.

Woodford called the revelations by Olympus "shocking" and called once again for the replacement of the company's board, saying their position is now "untenable.", a report on the Wall Street Journal said. “I think we need to get everything out—we still need forensic accountants,” he said.

Depending on the scale of the cover-up scheme, the Tokyo Stock Exchange may put shares of Olympus on a watch list for possible delisting, media reports said.