Olympus loss-hiding scandal

The Japanese camera maker Olympus sued 19 current and former executives for their alleged role in a £1bn accounting cover-up. It was revealed when Michael Woodford, the former chief executive, got dismissed after expressing his concerns about the company's accounting practices. Mr Woodford had written six letters to directors questioning business methods at Olympus. He had raised a concern over Olympus' payment of $687m in fees to financial advisers during the acquisition of Gyrus - UK medical equipment company. Mr Woodford claims that there is a need to clear the situation completely in order to regain credibility. He is also calling for drastic changes in the board of directors.

The 19 sued executives initially denied their involvement in the cover-up, however they later admitted the company had been hiding losses. The firm has admitted to hiding losses of $1.7bn (£1bn) for twenty years. The lawsuit was filed on 8 January, it seeks up to 3.6bn yen (£30.3m) in damages. The case will mainly focus on current and former board members, including ex-president Tsuyoshi Kikukawa, former vice president Hisashi Mori, auditor Hideo Yamada as well as current president Shuichi Takayama. All of them already have or are planning to step down this month altogether with other board members. The company has announced it will be holding an extraordinary general meeting on 20 April, where Olympus shareholders will get a chance to confront its management about the accounting scandal.

Olympus has lost 50 per cent of its market value since the scandal became public in October. Shares, however were slightly boosted by talk of Olympus’ takeover and a report that this large company is unlikely to be delisted. 

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