Olympus Corporation has announced (PDF) it is suing 19 current and former executives over their roles in conducting and covering up years of financial fraud that as brought the prominent Japanese electronics company to its knees in recent months. Overall, Olympus is seeking over ¥90 billion (about US$1.17 billion). including some ¥3.6 billion (about US$47 million) from former chairman Tsuyoshi Kikukawa and ¥500 million (about US$6.5 million) from current Olympus president Shuichi Takayama.
Olympus also says that all current directors of the company’s board who have been found liable in its investigation and have been sued by the company will step down at the “extraordinary” shareholders meeting to be conducted in March or April of this year. At that meeting, Olympus is expected to onboard new executive leadership and revamp its board of directors to include effective financial oversight. Several members of Olympus’s board have already resigned in the wake of the scandal.
Olympus stock jumped upwards with the announcement.
However, the company’s new leadership will not include ousted CEO Michael Woodford, who successfully blew the whistle on more than a decade of financial malfeasance shortly after being appointed CEO and questioning the finances of the company’s $2.1 billion takeover of the Gyrus Group in 2008. Last week, Woodford announced that he was giving up his bid to be re-instated as CEO, saying no Japanese institutional investors would back his candidacy—he might have done the ethical thing, but he was still a whistleblower that didn’t fit with Japan’s corporate culture. Woodford has announced plans to sue Olympus for wrongful termination.
Olympus’s investigation of fraud and wrongdoing uncovered a $1.7 billion cover-up running for more than a decade, intended to hide losses. The committee investigating the abuses found the company’s board was “rotten to the core” and the corporate culture comprised of “yes men” who failed in their duties.