Prosecutors, police raid Olympus over $1.7b scandal
updated 11:25 pm EST, Tue December 20, 2011
Olympus faces Japanese government raids
Police, regulators, and prosecutors raided Olympus' headquarters and the homes of key executives on Wednesday local time following an independent panel's determination that it had hid $1.7 billion in its 20-year-old accounting scandal. The Tokyo area raids, which included former chairman Tsuyoshi Kikukawa's home, were part of an unusual joint investigation. Their actions were part of an official look that could result in formal charges if the accounting shuffles had enough of an impact to make the company liable.
The camera builder had just barely met a deadline for updating its accounting before it risked being delisted on the Tokyo Stock Exchange. It could still be delisted if there is a legal fallout. In the US, the FBI is also known to be looking into the affair.
All of the legal and stock exchange impact came after the board, primarily orchestrated by Kikukawa, fired its CEO Michael Woodford. It quickly became apparent that Kikukawa and at least two others, VP Hisashi Mori and even internal auditor Hideo Yamada, had ousted the company's first non-Japanese CEO after he threatened to reveal the truth. The company eventually admitted that it had paid huge advisor fees and made questionable acquisitions to mask losses in securities during the 1990s.
Kikukawa, Mori, and Yamada all resigned, but it's believed others might have been involved, including external companies. Woodford has been angling to get back his one-time CEO position but has so far been unsuccessful.
