Japan prosecutors charge key figures in Olympus scandal

Wed Mar 7, 2012 7:19am EST
 
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TOKYO (Reuters) - Tokyo prosecutors on Wednesday charged Olympus Corp and six key figures in the $1.7 billion accounting fraud at the camera and endoscope maker, tightening their case in the investigation of one of Japan's biggest corporate scandals.

Prosecutors charged ex-chairman Tsuyoshi Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada with inflating the company's net worth in financial statements for the fiscal years ended March 2007 and 2008, in violation of the Financial Instruments and Exchange Law.

Also charged were former bankers Akio Nakagawa, Nobumasa Yokoo and Taku Hada, prosecutors said in a statement.

The six were arrested in February on suspicion of filing false financial statements to help hide huge investment losses through complex takeover deals at the company. Prosecutors did not charge a seventh person they arrested last month.

"We take these charges very seriously and will continue to strengthen our corporate governance," Olympus said in a statement. "We again express our deep apologies to shareholders, investors, business partners, customers and other related parties for causing trouble."

Prosecutors on Wednesday also rearrested Kikukawa, Mori, Yamada and Nakagawa on suspicion of also submitting false financial statements for the fiscal years ended in March 2009, 2010 and 2011.

In Japan it is common for prosecutors to re-arrest suspects under new but related counts. They must decide within 20 days whether the suspects are to be formally charged over the fresh allegations.

Japan's securities watchdog on Tuesday requested that prosecutors file criminal charges against the individuals involved in the scandal and the company itself.

Under the charges, Olympus executives could face up to 10 years in prison, or a fine of up to 10 million yen (about $125,000), lawyers have said.   Continued...

 
The Olympus logo on its camera is seen in this illustrative photograph taken in Tokyo November 24, 2011.   REUTERS/Kim Kyung-Hoon