Olympus discloses US$687 million advisory fee


AFP

TOKYO — Japan’s Olympus on Wednesday confirmed it paid US$687 million to an adviser in one of four deals under heavy scrutiny after its former CEO said he was ousted over his investigation into the issue.

Michael Woodford, who was demoted on Friday over “differences in management style” six months after being appointed president and two weeks after he was also named chief executive, had raised concerns over the fee.

It is also double the amount that Olympus chairman Tsuyoshi Kikukawa was quoted on Tuesday as saying the company had paid.

Shares in the camera maker have fallen nearly 44 percent since Friday when Woodford was demoted amid the claims and counter-claims for both sides.

A 30-year company veteran, its first non-Japanese president and chief executive said he was removed after he wrote to the company’s chairman over the payments and urged him to resign, citing major governance concerns.

The Briton raised questions about the size of payments made by Olympus in a series of deals between 2006 and 2008. Among them is the US$1.92 billion acquisition of British medical-instruments company Gyrus Group and the US$687 million paid to an adviser on the purchase. The fee works out to more than a third of the total purchase price, much higher than the one or two percent normally charged. Olympus has denied any wrongdoing and on Wednesday said its total payments to advisers included the redemption of preference shares. It said it paid about US$244 million in return for advisory work on the acquisition, including around US$177 million in Gyrus preferred shares issued to the adviser. It did not release the name of the advisory firm.