Woodford to sue Olympus over firing, drops CEO bid

Fri Jan 6, 2012 5:08pm EST
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By Tim Kelly

TOKYO (Reuters) - The ousted British CEO of disgraced Olympus Corp, who blew the whistle on a $1.7 billion accounting fraud, dropped his bid to return to lead the medical device maker, blaming cozy ties between its management and big Japanese shareholders and saying the saga had taken its toll on his family.

Michael Woodford's campaign against its management rocked the once-proud maker of endoscopes and cameras, but failed to win over Japanese institutional shareholders including Olympus' main lenders, who support a board that has been castigated for insufficient oversight.

"Despite one of the biggest scandals in history, the Japanese institutional shareholders have not spoken one single word of criticism, in complete and utter contrast with the overseas shareholders who were demanding accountability," Woodford told a news conference in Tokyo on Friday.

The decision by Woodford, who was fired in October after just two weeks as chief executive, leaves foreign shareholders who want a new slate of directors, including U.S. fund manager Southeastern Asset Management, without a champion to lead any proxy battle when the company convenes an extraordinary shareholders meeting as early as March.

"We applaud and respect (Woodford's) actions and regret that he has decided to withdraw. Olympus ... continues to suffer under shoddy corporate governance and an utterly discredited board. We maintain that the board should be replaced and a new board should oversee the company's revival," Josh Shores, Southeastern's Senior Analyst and Principal said in a statement.

Woodford said he would sue Olympus for unfair dismissal and had instructed his lawyers to begin legal action in Britain. Olympus said in October it fired Woodford because he failed to understand the company's management style and Japanese culture.

"There are no grounds whatsoever for dismissal," he said.

Woodford, looking calmer than at his last news conference in Japan, where he lashed out at Olympus executives and big Japanese shareholders, called his sacking and later developments an "Alice in Wonderland" situation.   Continued...