Analysis: Olympus ex-CEO looks to be losing boardroom bid

Tue Dec 20, 2011 5:34am EST
 
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By Emi Emoto and Nathan Layne

TOKYO (Reuters) - Michael Woodford, the ousted boss of Japan's Olympus Corp, has won the battle to force his former employer to admit to more than a decade of accounting fraud. His bid to return as chief executive officer, however, appears doomed.

Woodford has said major lenders to the maker of cameras and medical equipment will decide its fate - and those banks are already lined up behind Olympus managers, seemingly intent on slamming the boardroom door shut on him for good.

Olympus' lenders, led by Sumitomo Mitsui Financial Group (SMFG), are likely to deliver the final blow to the Briton's comeback campaign by backing a plan to bring in a new domestic investor to pump more capital into the firm, say bankers familiar with their thinking.

They say the new investor, possibly a Japanese rival such as Fujifilm, would bolster Olympus with a dose of fresh equity, but in the process also weaken the influence of foreign shareholders who are the main backers of a Woodford comeback.

The Nikkei business daily reported on Tuesday that Olympus may issue about $1.28 billion (100 billion yen) in new preferred shares, with Sony and Fujifilm seen as possible buyers. Panasonic Corp may also buy some of the stock, the report said.

Olympus said it had made no decisions about capital raising, while Sony and Fujifilm declined to comment.

COZY TIES

As evidence that the deck is stacked against Woodford, the bankers point to his criticism of cozy ties between Olympus and its main Japanese investors, and to signs SMFG in particular is backing the current board, the same team that sacked him.   Continued...