Olympus whistle blower Woodford drops job campaign

6th January 2012, Comments 0 comments

Whistle blower Michael Woodford said Friday he would sue Olympus over his sacking after a "depressing" lack of support from Japanese institutional shareholders scuppered a bid to get his old job back.

The former chief executive said he was ditching his campaign to install a fresh slate of directors under his leadership and would be seeking compensation for his October firing that sparked one of Japan's biggest corporate dramas in decades.

The Briton -- the first non-Japanese ever to hold the posts of president and chief executive at the 92-year-old camera maker -- said his efforts to rally support for a fresh start for the company had proved fruitless.

"The major reason for the continuing uncertainty is that despite my having done the right thing, none of the major Japanese institutional shareholders have offered one word of support to me and conversely have in effect allowed the tainted and contaminated board to continue in office," he said.

He said the scandal that he had exposed, which involved the covering up of millions of dollars worth of dodgy investments, and the way it had been handled had left a stain on corporate Japan.

"The fact that such a situation can exist despite the explicit findings of the third-party committee is depressing and totally disorientating to those looking in on Japan from the outside."

Among major shareholders were Nippon Life Insurance Co. and big banks such as Sumitomo Mitsui Banking Corp, according to the latest available documents.

Neither Olympus nor its major shareholders had so far made any comments on Woodford's statement.

Shares in the camera-maker fell more than four percent to 985 yen shortly after the opening but recovered later in the day to close 2.13 percent higher at 1,053 yen.

The figure is less than half what it was the day before Woodford was forced out.

The Briton has maintained he was sacked because he accused the company of overpaying in acquisition deals in recent years and raised doubts over the firm's corporate governance.

Olympus later admitted the deals had been used to cover up huge investment losses dating back to the 1990s and a report from a third-party investigation panel slammed its top management as "rotten".

On Friday, Woodford said he planned to sue the company over his dismissal before the end of a four-year contract because it "had absolutely no legal basis", according to Dow Jones Newswires.

He said he has already filed a lawsuit against the company with a tribunal court in Britain and that another lawsuit in Japan may follow, adding that he would be looking for "substantial and significant" damages.

In earlier visits to Japan, he had pledged a proxy battle at a general shareholders' meeting -- in which like-minded shareholders join forces to remove the board.

But he faced resistance from Japan's cosy corporate culture, in which major shareholders are reluctant to go against boards and seen as unlikely to back an outsider.

Woodford said his fight also made his family suffer.

"It's been a frightening period for my wife, who has suffered a lot and every night still wakes screaming in a trance and it takes several minutes to calm her.

"She finds the uncertainty and hostility of the public fight difficult to cope with and I have therefore decided for her emotional well-being that I cannot put her through any more anguish, and will today withdraw from any further action to form an alternative slate of directors," he said.

Japanese authorities have launched a criminal investigation into Olympus, raiding its headquarters in Tokyo last month and questioning its former executives in the alleged fraud.

The third-party panel of lawyers and accountants appointed by the firm said last month that former president Tsuyoshi Kikukawa and his predecessor Masatoshi Kishimoto were instrumental in the cover-up.

The panel said a small group of top executives hid at least 134.9 billion yen ($1.75 billion) in losses from bad investments in the 1990s.

Olympus avoided having its shares automatically pulled from the Tokyo Stock Exchange when it filed its delayed earnings report on the December 14 deadline, revealing a 32.3 billion yen loss in the first half of the year.

The firm also filed corrected earnings reports for the past five fiscal years, fixing results up until March 2011 to account for the investment losses it had shifted off its books.

© 2012 AFP

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