The Olympus scandal that rocked the business world last year was one of the biggest cases of financial fraud ever seen in corporate Japan. The Economist has published an interesting piece on why Japanese capitalism might not learn from the mistake:
At one point Olympus’s shares lost about 80% of their value, yet its institutional shareholders uttered not “one word” of criticism against the company’s board [...] For many, the Olympus scandal highlighted the need for more checks and balances. Mr Woodford (pictured), whose angry memoir is to be published this month, likens Japanese boardrooms to “Alice in Wonderland”. They need more assertive shareholders and regulators, and more independent directors, he reckons.
Keidanren, Japan’s big-business lobby, appears to have drawn the opposite conclusion. Olympus had three external directors, a high number for Japan [...] The problem, in Keidanren’s view, was too much external scrutiny.
After the United States was rocked by its own series of financial scandals in the early 2000s, the government increased regulation by passing the controversial Sarbanes–Oxley Act of 2002.
After the Olympus scandal, Japan Inc wants less scrutiny [The Economist]
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The Los Angeles Times is reporting that Kodak may be “a shutter click from extinction”:
Once ranked among the bluest of blue chips, Kodak shares sell today at close to $1. Kodak’s chairman has been denying that the company is contemplating a bankruptcy filing with such vehemence that many believe Chapter 11 must lurk just around the corner.
The Rochester, N.Y., company said it had $862 million in cash on hand as of Sept. 30, but at the rate it’s losing money from operations (more than $70 million a month), that hoard would barely last a year.
No wonder the company is trying to find someone to purchase its online photo sharing service for hundreds of millions. Even if it did manage to find a buyer, the sale would only buy a few more months of life unless the company can figure out how to stop the bleeding.
Kodak’s long fade to black [Los Angeles Times]
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Olympus has been in the photography game since introducing its first camera back in 1936, but its future as a major player is at risk now that the company is caught up in one of the largest corporate scandals Japan has ever seen. According to Reuters, the company is reviewing its business structure, and there is speculation that it may be forced to sell off assets to survive.
While the company may be best known for its cameras, its actually built around a $2.6 billion endoscope business, of which it virtually holds a worldwide monopoly. Its camera business, on the other hand, is operating at a loss. According to investment bankers, other camera manufacturers are following the Olympus saga closely, but will likely hold off on making a move until things clear up more.
Olympus to review business structure amid scandal (via 43 Rumors)
Image credit: Olympus OM-30 SLR camera (OM-F) by csaveanu