Olympus chairman quits as Japan watchdog probes firm

Wed Oct 26, 2011 5:59pm EDT
 
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By Taiga Uranaka

TOKYO (Reuters) - Olympus Corp head Tsuyoshi Kikukawa resigned on Wednesday after a scandal over hefty advisory fees wiped out half of the 92-year-old firm's market value while his successor stuck with the company's line that it had done nothing wrong.

Sources told Reuters that Japan's securities watchdog was looking into past Olympus takeover deals, focusing on whether it has properly disclosed relevant information.

Olympus fired its British chief executive, Michael Woodford, on October 14, just two weeks after his appointment as CEO, saying he failed to understand the company's management style and Japanese culture. Kikukawa then took over Woodford's role.

Woodford, who cut his teeth at the camera and endoscope maker as a British salesman when he joined in 1980, said he was sacked for questioning a $687 million advisory fee linked to a $2.2 billion takeover in 2008 as well as other deals he says have destroyed about $1.3 billion of shareholder value.

He has called for the resignation of Olympus' entire board while sending dossiers on odd-looking deals to Britain's Serious Fraud Office (SFO) and Japan's Securities and Exchange Surveillance Commission (SESC).

Olympus deals queried by Woodford also include a $60 million purchase that closed earlier this year of rights to a biotech remedy intended to help regenerate human bone from medical device maker Stryker Corp.

Olympus made a $25 million loan to Viscogliosi Brothers, the firm that advised it on the transaction, and expects it will need to write off most of that amount, according to company documents reviewed by Reuters. That loan and other payments may end up costing the Japanese firm around 50 percent more, the documents show.

Woodford is also in touch with the U.S. Federal Bureau of Investigation, and was in New York on Wednesday to meet with the agency.   Continued...