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Tokyo - Japanese prosecutors raided Olympus and the homes of former executives on Wednesday over a $1.7bn accounting scandal that has threatened the survival of the once-proud camera and medical equipment maker.
Tokyo prosecutors, police and financial regulators have joined forces in a rare joint investigation of the 92-year-old company, which has admitted to hiding huge investment losses via questionable M&A deals and other accounting tricks stretching back over two decades.
Public broadcaster NHK showed dozens of black-suited investigators marching double-file into an office building that houses three Olympus subsidiaries acquired under one of the loss-making schemes, in what has become one of Japan’s biggest corporate scandals.
Investigations moved into high gear after a panel of experts appointed by Olympus to probe the scandal said early this month that two senior former executives masterminded the scheme with the help of investment bankers. It also found that three former presidents, including Tsuyoshi Kikukawa who resigned in October over the scandal, had known about the cover-up.
Japanese media said Kikukawa’s residence was also included in the raid, as well as Olympus headquarters in a high-rise office district in central Tokyo.
Olympus last week filed five years of corrected accounts plus overdue first-half results, meeting a Tokyo Stock Exchange deadline to avoid a humiliating delisting but disclosing a much-depleted balance sheet.
Former CEO Michael Woodford, who blew the whistle on the scandal after being fired in October, is campaigning to get his job back but faces long odds in his battle with current management, which is expected to get backing from its bankers for a plan to bring in outside investors to bolster the company’s finances.
Olympus shares were down 1.5% at ¥1 049 at the midday break, giving up early gains that extended a 16% surge the day before. The shares had been under pressure as expectations of a capital raising by the company to shore up its finances stoked fears that existing shareholdings would be diluted.
But the market took a favourable view of a media report on Tuesday that Olympus plans to issue about ¥100bn ($1.3bn) in new shares, with high-tech blue chips such as Sony and Fujifilm seen among possible buyers, as the focus shifted to efforts to mend the company’s depleted finances, market sources said.
Tokyo prosecutors, police and financial regulators have joined forces in a rare joint investigation of the 92-year-old company, which has admitted to hiding huge investment losses via questionable M&A deals and other accounting tricks stretching back over two decades.
Public broadcaster NHK showed dozens of black-suited investigators marching double-file into an office building that houses three Olympus subsidiaries acquired under one of the loss-making schemes, in what has become one of Japan’s biggest corporate scandals.
Investigations moved into high gear after a panel of experts appointed by Olympus to probe the scandal said early this month that two senior former executives masterminded the scheme with the help of investment bankers. It also found that three former presidents, including Tsuyoshi Kikukawa who resigned in October over the scandal, had known about the cover-up.
Japanese media said Kikukawa’s residence was also included in the raid, as well as Olympus headquarters in a high-rise office district in central Tokyo.
Olympus last week filed five years of corrected accounts plus overdue first-half results, meeting a Tokyo Stock Exchange deadline to avoid a humiliating delisting but disclosing a much-depleted balance sheet.
Former CEO Michael Woodford, who blew the whistle on the scandal after being fired in October, is campaigning to get his job back but faces long odds in his battle with current management, which is expected to get backing from its bankers for a plan to bring in outside investors to bolster the company’s finances.
Olympus shares were down 1.5% at ¥1 049 at the midday break, giving up early gains that extended a 16% surge the day before. The shares had been under pressure as expectations of a capital raising by the company to shore up its finances stoked fears that existing shareholdings would be diluted.
But the market took a favourable view of a media report on Tuesday that Olympus plans to issue about ¥100bn ($1.3bn) in new shares, with high-tech blue chips such as Sony and Fujifilm seen among possible buyers, as the focus shifted to efforts to mend the company’s depleted finances, market sources said.
