Olympus board to quit over $1.7bn fraud

THE BOARD of Japanese electronics firm Olympus has signalled plans to quit over a $1.7 billion accounting fraud, but will likely pick a team of potential successors, triggering a battle for control of the firm with the former chief executive who blew the whistle on the scandal.

At a news conference yesterday, Olympus said one director had resigned, others may follow, and the entire board could go once the firm submits its second-quarter earnings, due by December 14th, and takes steps to put the disgraced company back on track.

An external investigative panel report, unveiled on Tuesday, concluded that several former executives spent 13 years running a complex scheme to hide huge investment losses off the company’s balance sheet.

“Our corporate governance was severely criticised. As the representative of the company, I apologise sincerely,” Olympus president Shuichi Takayama told reporters.

Former chief executive Michael Woodford, fired in October after questioning murky MA deals, is campaigning to return to head up the 92-year-old maker of cameras and endoscopes and has called for an extraordinary shareholders’ meeting to pick a new board.

Mr Takayama, who took over after the scandal broke, said the earliest such a meeting could be held was late-February, and the management wouldn’t resign before then – after picking its own slate of candidates.

“We are still considering the plan (for a new president) that we will submit. We don’t know what Mr Woodford is thinking, but he has said he will pursue a proxy fight, so we think there will certainly be a proposal.

We will have the shareholders meeting decide,” he said, although he gave a nod to whistleblower Woodford for “pointing out problems that the current board failed to do”.

Olympus also set up an outside committee to advise whether to file criminal complaints or sue those responsible for the scandal, which has halved the value of the firm’s shares and fanned fears about Japan’s corporate governance generally.

“We deeply regret that we have given a very negative impression to Japan and possibly the world,” a grim-faced Mr Takayama said. – (Reuters)