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Olympus Expected to Settle With Former CEO Woodford

Louise Lucas and Jane Croft

Olympus is expected to reach a £10 milliom ($16 million) settlement with its former chief executive, Michael Woodford, who was summarily fired last year after he raised questions about $1 billion in suspicious payments made by the Japanese optical equipment maker.

Michael Woodford, former chief executive officer of Olympus Corp., at a news conference in London.
Bloomberg | Getty Images

An employment tribunal was adjourned twice on Monday in East London, but Judge Foxwell insisted there be no delays when it reconvenes on Tuesday. The postponements are understood to have been caused by attempts to settle, which are now edging closer to compromise.

Mr Woodford, a Briton and one of just a handful of foreign chief executives in Japan, had 44 months left on his contract when he was fired, a decision Olympus initially attributed to management style.

Tsuyoshi Kikukawa, the former Olympus chairman who was eventually forced to resign over the scandal, later described Mr Woodford’s public questioning of the company “aberrant” and “unforgivable”.

Mr Woodford might receive the pay he was entitled to over the remainder of his contract – or more than £10 million. Olympus and Mr Woodford declined to comment ahead of the possible settlement.

Mr Woodford has made it clear he will not agree to a settlement that prevents him from continuing to speak publicly about his experiences at the company. He has already published a book in Japanese, with the English-language version due out this year.

He had been expected to sue at the tribunal for up to 10 years of lost earnings, or about £35m. The hearing has been scheduled for five days and will hinge in part on whether the London tribunal believes his dismissal falls within its jurisdiction.

Mr Woodford initially campaigned to be reinstated as chief executive, before announcing plans to take legal action against Olympus in January.

Since his disclosures, Olympus’ board has been partially replaced and the accounting scandal has been investigated by a number of bodies, including the UK Serious Fraud Office and the US Federal Bureau of Investigation.

After initially denying wrongdoing, Olympus admitted that it had been stashing loss-making securities investments in the Cayman Islands and other offshore centres since the early 1990s.

The acquisitions, for which Olympus intentionally overpaid, had been part of a complex scheme to square its accounts. In February, seven people were arrested in connection with the fraud.