Olympus scandal linked to Japanese mafia: report

21st November 2011, Comments 0 comments

Financial brokers who helped Olympus cover up years of investment losses, now at the centre of a growing scandal, have indirect links to Japan's yakuza crime syndicates, a press report said Monday.

Rewards that brokers earned from helping Olympus cover up the shortfalls could have been channeled to the notorious organised crime groups, the Japanese daily Sankei Shimbun said.

Olympus, a major producer of medical imaging systems and digital cameras, has admitted that it covered up huge investment losses dating back to the 1990s with fees for acquisitions and consultants.

The brokers who were involved in the acquisition schemes numbered around 10, among them former major securities firm officials, Sankei said.

"They are not members of crime syndicates themselves" but are said to have links to people "who conduct economic activities together with antisocial forces," the daily said without citing sources.

"Antisocial forces" is a euphemism used in Japan to mean yakuza.

"Therefore the brokers' connections can be traced into the territory of crime organisations," Sankei said.

"There is the possibility that Olympus has supplied cash (to organised crime) as a result, without knowing the background of (investment) funds effectively controlled by such brokers," the daily said.

The yakuza have been closely monitored but historically largely tolerated by the authorities. However, a clampdown is now under way.

Like the Italian mafia or Chinese triads, they have engaged in activities from gambling, drugs and prostitution to loan sharking, protection rackets, white-collar crime and business conducted through front companies.

Japanese prosecutors questioned former Olympus vice president Hisashi Mori on Friday over his alleged involvement in the cover-up, local media said.

Prosecutors are also likely to hold hearings with former Chairman and President Tsuyoshi Kikukawa and auditor Hideo Yamada, Jiji Press and Kyodo news agency said.

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.

Mori reportedly led four deals including the $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.

Olympus also reportedly paid some $950 million to buy three domestic companies, including health-food firm Humalabo, between 2006 and 2008, before immediately writing off the investments.

The brokers, who were involved in these schemes, all have experience working at banks and securities firms at home and abroad, Sankei said.

"Many of them have their base in Singapore where the confidentiality of information, such as bank accounts, is highly secured," the daily said.

The latest developments come after weeks of pressure in the wake of former Chief Executive Michael Woodford's blowing the whistle on payments made in the four deals.

Woodford said he was dismissed after he alleged overpayments and called on then-chairman Kikukawa to resign.

The Briton is expected to return to Tokyo on Wednesday for the first time since the crisis erupted, to speak with Japanese police, prosecutors and regulatory agencies probing the case.

© 2011 AFP

0 Comments To This Article