Olympus
Corp. (7733)’s former Chairman Tsuyoshi Kikukawa pleaded guilty to
covering up losses at the Japanese camera maker in an accounting fraud
case that sparked criticism of ineffective corporate governance in
Japan.
“The entire responsibility lies with me,” Kikukawa said in Tokyo District Court today, the trial’s first day. “The action troubled shareholders, business partners, employees and the public.”
Kikukawa, former Olympus Executive Vice President Hisashi Mori and Hideo Yamada, a former auditing officer, all pleaded guilty today to falsifying regulatory filings in violation of the Financial Instruments and Exchange Act. The executives face as much as 10 years in jail and as much as 10 million ($128,000) in fines, according to the website of accounting firm Deloitte Touche Tohmatsu LLC.
“We’re looking for a strong reaction from the court in terms of a strong sentence,” said Jamie Allen, secretary general of the Asian Corporate Governance Association. “That’s what investors are looking for and clearly that’s what the government would like.”
Olympus President Hiroyuki Sasa also submitted a guilty plea today for the company’s role in the fraud. The camera and endoscope maker faces as much as 700 million yen in fines for violating the rules, according to Deloitte’s website.
“Olympus was one of the biggest frauds in Japanese history,” Allen said in an interview aired on Bloomberg Television today. “A lot of money was lost.”
The company is now seeking investors to help shore up capital eroded after acknowledging the fraud. Sony Corp. will invest about 50 billion yen in Olympus and the agreement may be announced as early as this week, the Wall Street Journal reported Sept. 20, citing people with knowledge of the talks.
Founded in 1919 as a microscope and thermometer maker, Olympus produced its first camera in 1936 and a predecessor to the modern-day endoscope in 1950, according to its website. The company controls 75 percent of the global market for endoscopes, instruments doctors use to peer inside the body to help diagnose disease.
Akio Nakagawa and Nobumasa Yokoo, investment advisers cited in an outside panel’s December report as having helped the company cover up losses, were also indicted separately from the three whose trial started today. The date of their trial hasn’t been decided. Taku Hada, an associate of Nakagawa and Yokoo, is also under indictment.
The accounting fraud “destroyed the image of Japanese companies internationally,” Kikukawa said today in court.
http://www.businessweek.com/news/2012-09-24/ex-olympus-chairman-admits-accounting-fraud-role-in-tokyo-court
“The entire responsibility lies with me,” Kikukawa said in Tokyo District Court today, the trial’s first day. “The action troubled shareholders, business partners, employees and the public.”
Kikukawa, former Olympus Executive Vice President Hisashi Mori and Hideo Yamada, a former auditing officer, all pleaded guilty today to falsifying regulatory filings in violation of the Financial Instruments and Exchange Act. The executives face as much as 10 years in jail and as much as 10 million ($128,000) in fines, according to the website of accounting firm Deloitte Touche Tohmatsu LLC.
“We’re looking for a strong reaction from the court in terms of a strong sentence,” said Jamie Allen, secretary general of the Asian Corporate Governance Association. “That’s what investors are looking for and clearly that’s what the government would like.”
Olympus President Hiroyuki Sasa also submitted a guilty plea today for the company’s role in the fraud. The camera and endoscope maker faces as much as 700 million yen in fines for violating the rules, according to Deloitte’s website.
Value Slashed
Olympus’s market value has shrunk 41 percent since the Oct. 14 dismissal of former Chief Executive Officer Michael Woodford, who had challenged Kikukawa and the board over inflated takeover payments, which led to an investigation that uncovered the accounting irregularities.“Olympus was one of the biggest frauds in Japanese history,” Allen said in an interview aired on Bloomberg Television today. “A lot of money was lost.”
The company is now seeking investors to help shore up capital eroded after acknowledging the fraud. Sony Corp. will invest about 50 billion yen in Olympus and the agreement may be announced as early as this week, the Wall Street Journal reported Sept. 20, citing people with knowledge of the talks.
Founded in 1919 as a microscope and thermometer maker, Olympus produced its first camera in 1936 and a predecessor to the modern-day endoscope in 1950, according to its website. The company controls 75 percent of the global market for endoscopes, instruments doctors use to peer inside the body to help diagnose disease.
Akio Nakagawa and Nobumasa Yokoo, investment advisers cited in an outside panel’s December report as having helped the company cover up losses, were also indicted separately from the three whose trial started today. The date of their trial hasn’t been decided. Taku Hada, an associate of Nakagawa and Yokoo, is also under indictment.
The accounting fraud “destroyed the image of Japanese companies internationally,” Kikukawa said today in court.
http://www.businessweek.com/news/2012-09-24/ex-olympus-chairman-admits-accounting-fraud-role-in-tokyo-court
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