OLYMPUS HAS acknowledged wrongdoing for the first time in a scandal involving more than $1 billion (€700 million) in acquisition-related payments contested by its former chief executive, saying that the money had been used secretly to cover losses on investments dating back to the 1990s.

In an affair that has shone a harsh light on Japanese corporate governance, the camera maker had defended the payments – including a nearly $700 million advisory fee paid in a 2008 acquisition – since they were revealed more than three weeks ago by Michael Woodford, then chief executive.

Olympus sacked Mr Woodford on October 14th after he pressed fellow board members for information on the deals, which were made under his predecessor.

“Since the 1990s, our company has been putting off booking losses on securities investments,” the Japanese group said. Company president Shuichi Takayama bowed deeply at a news conference and apologised for the “highly inappropriate disposal” of the losses.

Mr Takayama declined to say whether he thought the company or its executives had committed any crimes but said that he believed that three directors named by Olympus as having orchestrated the scheme possessed “an awareness of illegality”. Authorities in Japan, the UK and US are investigating.

Olympus sacked one of the executives, deputy president Hisashi Mori, yesterday and said that another, Hideo Yamada, had resigned. The third director, Tsuyoshi Kikukawa, stepped down as chairman last month. – (Copyright The Financial Times Limited 2011)