Japan's Olympus 'no comment' on FBI probe reports

25th October 2011, Comments 0 comments

Japanese camera maker Olympus on Tuesday declined to comment on media reports it was being investigated by the FBI over a near $700 million payment in advisory fees.

The US Federal Bureau of Investigation probe comes after shares in the company have plunged, losing around half their value about two weeks following the ousting of British CEO Michael Woodford.

Woodford was fired after raising questions about the size of payments made by Olympus in a series of deals between 2006 and 2008.

Among them is the $1.92 billion acquisition of British medical-instruments company Gyrus Group and the $687 million paid to an adviser on the purchase.

Woodford had commissioned a report on the deal from accounting firm PricewaterhouseCoopers (PwC) which queried why the payment was so high.

The fee works out at more than a third of the total purchase price, much higher than the one or two percent normally charged in acquisition deals.

The fees were paid to a Cayman Islands investment fund overseen by the US-based Axes, the New York Times reported.

The banker at the centre of the controversy has met with the FBI about the matter, the Wall Street Journal reported, citing people familiar with the situation.

A spokesman for Olympus in Japan, Tsuyoshi Kitada, declined to comment, saying only: "We cannot answer as we have not obtained the information (about the FBI probe)."

Woodford was sacked only six months after being appointed president and two weeks after he was also named chief executive.

The 30-year company veteran, Olympus' first non-Japanese president and chief executive, said he was removed after he wrote to the company's chairman and urged him to resign over the payments, citing major governance concerns.

Woodford also queried Olympus' purchase of three Japanese companies unrelated to its core precision equipment businesses for hundreds of millions of dollars that it later wrote down.

Shareholders have pushed Olympus for answers with the company's Tokyo stock exchange-listed shares on Tuesday at 1,185 yen, up 7.82 percent during the session after losing 11 percent on Monday.

The shares have lost around 50 percent since their closing value on October 13, the day before Woodford's ouster.

© 2011 AFP

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