Japan to Investigate Olympus Amid Investment Scandal

Posted November 11th, 2011 at 5:25 am (UTC-5)
Leave a comment

Japan's financial watchdog said Friday it would move quickly to investigate camera and medical equipment maker Olympus, after the company revealed it hid massive losses on securities investments dating from the 1990s.

Financial Services Minister Shozaburo Jimi said the scandal had sparked distrust among investors internationally.

Olympus President Shuichi Takayama acknowledged Tuesday that losses were hidden in part through a $2 billion purchase of a British medical equipment maker in 2008. The purchase price included a $687 million advisory fee, which was far above the usual fee paid for such a deal.

The admission sent Olympus' stock plunging. Observers say the revelations could lead to the 92-year-old company being de-listed from the Tokyo Stock Exchange.

Another $773 million in losses was hidden through the purchases of three small Japanese companies between 2006 and 2008. The companies had little to no relation to Olympus' core business, which involves making cameras and hi-tech surgical equipment.

The deals were first questioned by Briton Michael Woodford, who was fired as Olympus chief executive officer on October 14. Woodford told reporters days after his dismissal the scandal rose to the level of criminal activity.