Scandal-rocked Japanese technology company Olympus warned this week that it would not be able to meet a November 14 deadline to submit its quarterly earnings report, prompting the Tokyo Stock Exchange to warn the company its shares would be de-listed if Olympus can’t submit its report within one month of the statutory deadline.
In the meantime, the Nikkei reports that the third-party committee looking into Olympus’s finances for the last 20 years has found the company has long been concealing losses behind series’ of inflated bank deposits and securities holdings, with the total losses concealed behind a wall of “assets” may have peaked at some ¥130 billion (about US$1.68 billion) as of early 2005. In addition, Olympus now finds itself at the center of a rare joint investigation between two of Japan’s top law enforcement agencies and securities regulators.
The full report of the third-party investigative committee isn’t due until early December. Olympus is waiting for the results before reporting its second-quarter financials.
Shares of the camera and medical equipement maker have lost more than three quarters of their value since the scandal broke last month. Olympus fired its first non-Japanese CEO, Michael Woodford, ostensibly because his management style was at odds with Olympus’s culture; however, Woodford said he was fired after he questioned payments related to four recent acquisitions, including Olympus’s takeover of British medical gear maker Gyrus for $2.2 billion in 2008—in a deal that saw almost $690 million paid to a firm in the Cayman Islands with unknown owners. After weeks of protesting everything was on the up-and-up, Olympus finally came clean and admitted that it had been using merger and acquisition deals to hide losses going back at least two decades. The move is almost unheard-of in Japanese business culture and has sent shockwaves through the business community.
Olympus has put the blame on three long-time executives, including former president Tsuyoshi Kikukawa. Some investors are now calling for sweeping changes in Olympus’s corporate governance, including the ouster of all directors. One UK fund manager has even called for Olympus to re-instate Michael Woodford as CEO.
- Facebook warns that third-party apps could have been affected by recent breach
- Lockbox for fridge keeps medication and alcohol away from kids, wins hackathon
- Facebook is paying cash rewards if you find vulnerabilities in third-party apps
- Apple acquires music-seeking app Shazam
- The best Amazon Original series (November 2018)