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Ex-Olympus Boss to Meet Japanese Police

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

Michael Woodford, the former Olympus chief executive whose revelations about suspicious acquisitions by the camera maker precipitated a scandal over improper accounting, will return to Japan next week to speak with authorities investigating the case, the Financial Times has learned.

Mr. Woodford confirmed to the FT that he would meet next Thursday with Japanese police, prosecutors and officials from the Securities and Exchange Surveillance Commission, Japan’s financial markets regulator, in his first trip to Tokyo since Olympus fired him on Oct 14.

The Briton returned to the UK immediately after he was sacked amid a clash with other executives over the deals. Olympus has since admitted using phoney fees and inflated valuations in four acquisitions to dispose of long-hidden losses on securities investments.

His return could galvanize the response of Japanese law enforcement agencies and regulators to the scandal. More than $1 billion was diverted in the four deals, but Olympus has yet to identify who received the money or explain how it disguised the losses, which it says dated from the 1990s.

The US Federal Bureau of Investigation and the UK Serious Fraud Office are also investigating international aspects of the case. In one of the acquisitions, Olympus’ 2008 purchase of the UK medical equipment maker Gyrus, the Japanese group paid $687m to an obscure US-based financial adviser and an affiliated fund in the Cayman Islands.

Before he was fired, Mr. Woodford had questioned Olympus’ chairman and two other executives about the deals, which took place between 2006 and 2008, before he joined the board. Mr. Woodford became Olympus’ president in April, after working for 30 years at the company’s European arm.

Olympus has blamed the chairman, Tsuyoshi Kikukawa, and the other two executives for orchestrating the accounting deception. Mr. Kikukawa resigned as chairman in late October and the others lost their executive positions last week, but none has spoken publicly since the company admitted wrongdoing.

In addition to the investigations by government authorities, a team of Olympus-appointed legal experts is also looking into the affair.

The scandal has forced the company to delay announcing its results for the first half of the financial year, but it must report by December 14 or face delisting from the Tokyo Stock Exchange. The exchange could also eject Olympus if the company is found to have falsified financial statements or its auditors refuse to sign-off on its earnings.