Woodford Sees More Revelations, to Attend Olympus EGM


Official investigations into a massive fraud at Japan's Olympus are highly likely to lead to further revelations on the scandal soon, according to the firm's former chief executive, Michael Woodford, who blew the whistle on the affair.

Michael Woodford, the former CEO of Japan's optical giant Olympus.
Jiji Press|AFP|Getty Images

The maker of cameras and medical equipment is trying to put the $1.7 billion scandal behind it, having wrapt up its own third-party investigation late last year. It is seeking out investment partners and looking to vote in a new board in April.

However, law-enforcement agencies in Japan, Britain and the United States are still investigating the fraud at the multinational which, according to the third-party probe, was used to hide investment losses from investors for 13 years.

"Investigations into the scandal are ongoing on three continents and, therefore, we are still not in a position to know the full extent of what took place," Woodford said in an email to Reuters, after Olympus announced on Sunday that it would hold an extraordinary shareholder meeting on April 20.

"But before April's extraordinary general meeting, I believe it is highly likely there will be further revelations and all interested parties should continue to closely scrutinise events," he added, without elaborating.

The U.S. Federal Bureau of Investigation, Britain's Serious Fraud Office and Japanese law-enforcement and regulatory agencies have all spoken to Woodford since the scandal broke, but have yet to announce any findings.

The April shareholder meeting is likely to be a lively encounter, with Woodford revealing in the email that he would attend, and urging Olympus to hire a larger venue than normal.

"I am monitoring events at Olympus extremely closely," he said, noting the company's efforts to find a strategic investor and also raising the question as to how many of the existing board would quit and who would replace them.

"I have strong opinions on both these issues as I'm sure do many thousands of other Olympus shareholders," he added.

"This will be the first formal opportunity for all of the company's shareholders to question and hold its management to account."

Woodford had ignited the scandal in October, after he was sacked for asking questions internally about Olympus' dubious accounting and about some highly unusual acquisition payments, which were later revealed to have been part of the fraud.

Olympus is counting on the April meeting to be a turning point in the scandal, with at least six of its 11-member board, including company president Shuichi Takayama, set to resign and be replaced by shareholder vote.

Woodford has demanded the entire board go, though he recently gave up on his own campaign to be reinstated as Olympus chief, thwarted by the firm's major Japanese shareholders.

Olympus needs fresh capital to repair its balance sheet after recently setting its books straight, with Fujifilm, Sony and Panasonic speculated to be among potential investment partners.

Takayama said on Jan. 18 that his company had not been in specific talks with any of those firms and that Olympus would wait until after April's management overhaul to bring in a potential strategic partner.

Olympus plans to announce its October-December third quarter earnings results on February 13.