Olympus vows to pursue executives behind scandal

7th December 2011, Comments 0 comments

Scandal-hit Olympus vowed Wednesday to pursue legal action against past and present executives responsible for a massive loss cover-up that has hammered Japan's reputation for corporate governance.

Olympus President Shuichi Takayama said the embattled camera and medical equipment maker would consider "lodging a lawsuit" against any board members found to be responsible for the long-running scam.

"We as a company will take legal action against those who carried out wrongdoing," he told a press briefing Wednesday.

He did not specify who those board members might be.

But the comments come a day after a committee of outside lawyers and an accountant -- all chosen by Olympus -- concluded that former presidents Tsuyoshi Kikukawa and his predecessor Masatoshi Kishimoto approved the cover-up scheme, and described top management as "rotten" and "contaminated".

The panel's stinging report heaped criticism on executives for orchestrating the plan to hide 134.9 billion yen ($1.73 billion) in losses, and dismissed its board as a "mere facade."

Takayama said the company would create another panel to investigate executives' legal responsibility -- a mandate not given to the first committee.

A third panel would probe the role of the firm's auditors and non-executive employees in the scandal, which chopped about 80 percent off the value of the Olympus shares at one stage.

Takayama also said the company would consider asset sales or a merger to restructure the embattled firm, but added that it was "only a possibility."

"We have no concrete plan at this point," he said.

The firm's current executives would be replaced "at an appropriate time...after they pave a way forward to rebuild the company," Takayama said.

Any resignations and new executive hires would be subject to the approval of shareholders and a new management reform committee, but it was "highly likely" board members would quit at a yet-to-be scheduled shareholders meeting, he said.

A meeting would be held in late February at the earliest, Takayama said.

"We must change our corporate governance, we must renew the management -- that will include the way we select executives," he said.

Takayama also said whistleblowing former chief executive Michael Woodford had "brought to light what we could not do. We appreciate that action."

Woodford, the company's first ever non-Japanese president and chief executive, was sacked on October 14 after making public allegations about the cover up and serious governance problems at the 92-year-old firm.

Shareholders have grown increasingly concerned about Olympus' future, with US investment bank Goldman Sachs cutting its stake in the troubled company to 3.78 percent from 6.67 percent, according to a finance ministry filing.

The company, which is facing several legal and regulatory probes and has been hit with a class-action lawsuit filed by a US investor, reiterated that it was aiming to meet a December 14 deadline to release its earnings.

Olympus could be delisted from the Tokyo Stock Exchange if it misses the deadline.

Company shares closed down 5.2 percent at 1,128 yen on Wednesday, less than half their value before Woodford's sacking.

© 2011 AFP

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