Some would say that the Olympus accounting scandal is officially over, insofar as jail sentences (or, rather, the lack thereof) have been doled out by the Japanese justice system. Even the company’s stock has rebounded and is currently sitting about 25% higher than it was before the dive it took when the company’s seedy business dealings came to light.
But stocks rebounding and executives getting off almost scott free aside, Olympus’ battle against the backlash from the scandal is far from over, as both Japanese and overseas entities continue to pursue legal action. Read more…
The Olympus financial scandal — you know, the one that was discovered all the way back in October of 2011 — has been trying to reach a conclusion for some time now. But now that the Japanese justice system has reached a decision, many won’t be happy with the end result. Namely: all of the major players in the $1.7 billion scandal have managed to avoid jail time entirely, at least for now. Read more…
Former Olympus president Tsuyoshi Kikukawa may soon spend up to five years of his life in prison for his role in Olympus’ massive financial scandal that rocked corporate Japan back in 2011. Prosecutors allege that Kikukawa orchestrated a coverup of $1.7 billion in company losses, one of the biggest frauds in Japanese history and the country’s equivalent of America’s Enron scandal.
Well, if you thought the drawn-out drama of the notorious Olympus accounting scandal was over — we definitely did — you were wrong. It seems that white collar criminals not included in the original seven people arrested in the case shouldn’t take the yacht out of the marina just yet (or maybe they should), because, as former bank executive Chan Ming Fon learned yesterday, the FBI is still looking for you.
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]
Image credit: Photo illustration based on The Donatello Boardroom by ShellVacationsHospitality and Search. by Jeffrey Beall
It was almost exactly one year ago that Olympus fired then-CEO Michael Woodford and started a chain of events that culminated in one of the largest financial scandals in Japanese history. Woodford received an incredible amount of international attention for his role in the saga, since he was one of the highest ranking executives ever to turn into a whistleblower.
He may have lost his $8-million-a-year job, but he likely won’t ever need another: in addition to settling for a reported $15.5 million over the breakup, Woodford is also cashing in by writing a book that offers his account of what transpired.
It looks like the Olympus financial scandal is finally coming to an end. It has been nearly a year since it came to light that there were massive cases of fraud and coverups going on in the upper echelons of Olympus management. What started as a CEO’s firing quickly spiraled into one of the biggest scandals to ever hit corporate Japan — the country’s equivalent of the US’ Enron fiasco.
In the end, a number of the company’s top executives were arrested after submitting their resignations. The trials for those former bigwigs are only now starting to get underway. Three of them, including former chairman Tsuyoshi Kikukawa (pictured above), pleaded guilty today to charges of falsifying accounts and covering up more than $1 billion in losses. The camera company itself also filed a guilty plea.
Just yesterday news broke that Michael Woodford — the former Olympus CEO who blew the whistle on the now-infamous scandal and was subsequently fired — would be suing his former employer over unfair dismissal for a whopping $60 million dollars. And today, in an altogether not unexpected turn of events, Olympus is said to be preparing to settle out of court for a smaller (yet still massive) amount of money — “only” $15.5 million.
The settlement is still pending approval from the new board, but all evidence points to a positive outcome for Woodford, who over the last several months has been hailed as everything from whistleblower to “boldest business person of the year.” After this settlement we could probably also add “significantly rich[er]” to that list.
Image credit: Money by 401K
Former Olympus CEO Michael Woodford has gotten his wish: the entire Olympus board resigned this week in the aftermath of the company’s epic financial scandal and stock tumble. They did, however, pick a new president and chairman before handing in their letters of resignation. Hiroyuki Sasa from the company’s medical equipment marketing division was picked for president, while banker Yasuyuki Kimoto has been chosen as chairman. The changes are expected to be finalized at an April 20th shareholders meeting. Sasa has promised to both win back public trust and to prevent another scandal from every occurring.
(via New York Times via Engadget)
Image credit: Olympus Film Camera by Matt Cunnelly
An update to the financial scandal over at Olympus, which has quieted down quite a bit in recent days: former Chairman and President Tsuyoshi Kikukawa has been arrested with six other people (including three former executives) for “suspected violation of Japan’s Financial Instruments and Exchange Act”. As you might remember, Kikukawa replaced ex-CEO Michael Woodford after Woodford’s abrupt dismissal and stated that the move was because Woodford — who’s from the UK — didn’t fit into the company’s culture. Less than two weeks later, Kikukawa himself stepped down as the company found itself in an international financial fraud case.
Olympus Ex-Chairman Kikukawa Arrested With Six Others After Payment Fraud [Bloomberg]
Update: Apparently Michael Woodford has being approached by Hollywood to discuss making a movie about his whistle blowing and the ensuing scandal.