8 Nov 2011

Olympus admits it hid losses for decades

Japan’s Olympus finally admits to hiding losses on securities investments dating back to the 1980s, putting the future of the firm in doubt.

Olympus president Shuichi Takayama bows his head at a press conference in Tokyo on November 8, 2011. Olympus acknowledged wrongdoing for the first time (Getty)

Olympus said it had found that funds related to its $2.2bn purchase of British medical equipment maker Gyrus in 2008 – which involved a huge advisory fee of $687m, as well as payment of $773m for three domestic firms – were used to hide losses on the securities investments.

The revelations by the 92-year-old company, which makes endoscopes and cameras, would appear to vindicate the claims of its British ex-CEO Michael Woodford, who has staged a campaign since being sacked in October to force the firm to come clean on $1.3bn in questionable payments.

The disclosure leaves Olympus, its directors and its accountants open to possible criminal charges for suspected accounting fraud and shareholder suits, lawyers and analysts said, raising questions about the future of the firm, founded in 1919 as a microscope maker.

Olympus President Shuichi Takayama blamed Tsuyoshi Kikukawa, who quit as president and chairman on 26 October, Vice-President Hisashi Mori and internal auditor Hideo Yamada for the cover-up, saying he would consider criminal complaints against them.

“I was absolutely unaware of the facts I am now explaining to you,” a subdued Takayama, who had staunchly defended the deals when he took over from Kikukawa last month, told a news conference packed with some 200 journalists.

“The previous presentations were mistaken.”

Jon Snow blogs on the scandal tearing apart the venerable Japanese corporation