Japan prosecutors question ex-Olympus VP: reports

19th November 2011, Comments 0 comments

Japanese prosecutors have questioned a former vice president of Olympus over his alleged involvement in covering up investment losses, local media said Saturday.

Prosecutors, who questioned Hisashi Mori on Friday, are also likely to hold hearings with former chairman and president Tsuyoshi Kikukawa and auditor Hideo Yamada, Jiji Press and Kyodo news agency said.

Neither Olympus or prosecutors were immediately available for confirmation.

Olympus has admitted that it covered up huge investment losses dating back to the 1990s with fees for acquisitions and consultants.

Mori, who attended the questioning voluntarily, allegedly led four deals including a $2 billion purchase of British medical-instruments company Gyrus in 2008 in which Olympus has admitted paying $687 million to a little-known financial adviser based in the Cayman Islands.

Mori and Yamada allegedly manipulated books by employing a scheme called "tobashi" -- which translates literally as "blow away" -- moving investment losses off their accounts into areas where investors would not see them.

They are believed to have reported the cover up to Kikukawa, Jiji said.

The three men have reportedly admitted to an expert panel, set up by Olympus to investigate the scandal, that they were involved in the wrongdoing.

The latest developments come after weeks of pressure in the wake of former chief executive Michael Woodford blowing the whistle on payments made in the four deals.

Woodford said he was dismissed after he alleged overpayments in a series of acquisition deals and called on the then-chairman Kikukawa to resign.

Local media have reported that the losses may total more than 100 billion yen ($1.3 billion), but the company has refused to discuss the full scope of what happened, citing the ongoing probe by the expert panel.

Britain's Serious Fraud Office has also launched an investigation, along with probes by Japanese and other international agencies amid media speculation that yakuza crime syndicates may be involved in the scandal.

© 2011 AFP

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