Japanese police investigate Olympus over covering losses: reports

By Hiroshi Hiyama, AFP

TOKYO–Pressure on Japan’s scandal-hit Olympus intensified Thursday as police and other authorities launched investigations into the firm’s concealment of investment losses since the 1990s, reports said. The move came as a major shareholder called for the reinstatement of ousted British CEO Michael Woodford, whose removal in October revealed a fee payment scandal that has wiped more than 80 percent from the value of Olympus shares.

On Thursday, Olympus shares were down by their daily limit and ask-only at 484 yen amid concerns it will be delisted by the Tokyo Stock Exchange if it fails to release its delayed quarterly earnings report by Monday.

The Tokyo Metropolitan Police has started a full probe into whether the company may have conducted accounting fraud, the Yomiuri Shimbun said. The police have asked Olympus to submit its accounting documents and are coordinating with Tokyo prosecutors and the Securities and Exchange Surveillance Commission, which have begun separate investigations, it said. They may also work closely with the U.S. Federal Bureau of Investigation and the U.S. Securities and Exchange Commission, which are also investigating the matter, the newspaper said. Japan’s Financial Services Agency and the Tokyo Stock Exchange have also started separate investigations into Olympus and its auditing firms, the Nikkei business daily said. A spokeswoman at the Tokyo Metropolitan Police declined to comment on the reports on Olympus, which admitted this week that it covered up losses since the 1990s using funds related to four controversial acquisitions. It said Tuesday that investment losses — which had been kept off the books — were covered up by funneling money through funds paid in the acquisition of Gyrus Group PLC and expensive purchases of three small Japanese firms. The four deals include a US$2 billion deal for British medical-instruments company Gyrus, in which Olympus has admitted paying US$687 million to a little-known financial adviser based in the Cayman Islands. The deals came to widespread attention after Olympus ousted Woodford on Oct. 14.