Former Olympus boss ends takeover bid for camera firm

Michael Woodford says "Japanese shareholders have not spoken one single word of criticism"

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The ousted boss of Olympus has given up on his attempts to take control of the camera and medical equipment maker.

Michael Woodford, who was fired after highlighting accounting irregularities, is still planning to sue Olympus for unfair dismissal.

His original claims sparked a police probe and share price slump.

After initially denying the accusations, Olympus eventually admitted that it had hidden $1.5bn (£968m) of losses over 20 years.

Mr Woodford said he was giving up on his attempt to return to Olympus because he had failed to win support from main shareholders.

"Despite my having done the right thing, none of the major Japanese institutional shareholders have offered one word of support to me," Mr Woodford said in a statement.

Mr Woodford also claimed that the Olympus issue had caused his family distress.

Legal action

Start Quote

The cross-shareholding system in Japan, while clearly serving the country well in the years following the Second World War, is in today's world harmful due to the unwritten convention that one must never publicly criticise another”

End Quote Michael Woodford

On Friday, Mr Woodford revealed that he would be taking legal action against Olympus for unfair dismissal.

He said he had instructed his lawyers to bring a case in the UK and would be seeking damages.

"There are no grounds whatsoever for dismissal," Mr Woodford said.

At the time of his dismissal, Olympus said it was ending his contract because there was a clash of management styles.

When the scandal broke, a number of theories were mooted about why the losses were covered up, including allegations of criminal activity.

At the start of December, an independent panel appointed by Olympus found that while the "core part of management was rotten", there was no link to organised crime.

It said legal action should be taken against those involved in the cover-up, adding that those who knew about the situation should be replaced.

'Cross-shareholding'

Mr Woodford was trying to win support for himself and a new group of directors to take over the running of Olympus.

While Mr Woodford won the support of some shareholders, many of the company's key investors still backed the current management, headed by chief executive Shuichi Takayama.

He claimed that Japan's business culture in which many companies and managers have close ties to each other, meant that rigorous corporate oversight was often difficult.

"The cross-shareholding system in Japan, while clearly serving the country well in the years following the Second World War, is in today's world harmful due to the unwritten convention that one must never publicly criticise another," said Mr Woodford.

Olympus shares dropped more than 4% in Tokyo in early trading on Friday. However, they rallied later in the day and closed 2% higher at 1,053 yen.

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