Ex-Olympus boss in plea for answers
THE BRITISH former president of Olympus has demanded answers from auditors and Japanese regulators after the arrest of seven bankers and executives linked to the disgraced camera giant.
Michael Woodford, who was fired after exposing the $1.7bn (£1.08bn) accounting scandal, hailed the arrests as a moment of “vindication” and told City A.M. that more questions must be posed over the financing of Olympus and Gyrus, the British medical equipment firm it bought in 2008.
“Billions went through the banks. Olympus is highly indebted, who lent Olympus the money? What due diligence was done on the loans?
“KPMG qualified the accounts of Gyrus. How were they passed to Ernst & Young without questions being raised? The auditors have fundamental questions to answer.
“Olympus bought 100 firms from plastic plates to face cream to DVD reproduction. Why did they buy the companies and who gave the money?”
Last month a lawyers’ panel set up by Olympus cleared KPMG and E&Y of any responsibility for the accounting fraud. Yesterday KPMG and E&Y declined to comment.
Woodford spoke out hours after Tokyo prosecutors arrested ex-president Tsuyoshi Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said. Also arrested were former bankers Akio Nakagawa and Nobumasa Yokoo and two others suspected of helping hide huge investment losses through M&A deals.
The three former executives had been identified by the investigative panel as the main culprits in the fraud, seeking to delay the reckoning from risky investments made in the late-1980s bubble economy.
A series of Olympus directors are expected to step down at a shareholders’ meeting in April.