Olympus shares up 22% after chairman resigns

27th October 2011, Comments 0 comments

Shares in Japan's Olympus surged more than 20 percent in Tokyo trade on Thursday, a day after its under-pressure chairman and president resigned over a fee payments scandal.

The company had earlier held a press conference defending payments made in a series of deals at the centre of the scandal, which had wiped out around half of its share value and prompted two leadership changes in less than two weeks.

Olympus shares were up 21.92 percent at 1,340 yen in afternoon trade.

The company has been mired in crisis since ousting on October 14 its British chief executive and president, who contends he was fired after he raised questions about payments made in certain deals between 2006 and 2008.

His replacement, Tsuyoshi Kikukawa, who oversaw the questioned deals and who Woodford said he had confronted about the issue, resigned on Wednesday, as the company looked to arrest the decline of its stock price amid rising investor and client concerns.

Among four deals queried by Woodford was the $1.92 billion acquisition of British medical-instruments company Gyrus Group in 2008 and the $687 million that Olympus has admitted it eventually paid an adviser based in the Cayman Islands.

Also under scrutiny is the purchase of three small Japanese companies unrelated to its core precision instruments businesses for a total of 73.49 billion yen ($966 million at current rates) between 2006 and 2008, before heavily writing down their value a year later.


© 2011 AFP

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