Former Olympus boss calls for clearout of board

Former Olympus chief executive Michael Woodford Michael Woodford said the lawsuit was "an utter and complete vindication" for his stance

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The former chief executive of Japanese camera firm Olympus has said the decision to sue current and former executives is "deeply inadequate".

Michael Woodford was fired as chief executive after he questioned dubious payments made by the firm.

Olympus is now suing 19 current and former executives after a $1.7bn (£1bn) accounting cover-up.

But Mr Woodford told the BBC a complete clearout of the current Olympus board was needed to regain credibility.

"If corporate governance is to mean anything in Japan, and for those who care about the future of Olympus, the only way forward is an entirely new board of directors, which are untainted by the past scandal," Mr Woodford he said.

'Vindication'

Mr Woodford had written six letters to directors of the firm because of his concerns over business methods at Olympus

And he is now angry that some directors at the firm set to be exonerated.

Olympus is claiming damages of almost $50m, says the BBC's Roland Buerk in Tokyo

"All the existing directors - including the remaining ones who are not being sued, but they equally failed to react in such an extraordinary fashion to the six letters - should leave," he said.

The legal action comes after an independent panel report looking into management involvement in the fraud.

The lawsuit, filed on 8 January, seeks up to 3.6bn yen ($46.8m; £30.3m) in damages.

"It [the lawsuit] is an utter and complete vindication for my stance," Mr Woodford told the BBC.

The case will focus on current and former board members, including ex-president Tsuyoshi Kikukawa, former vice president Hisashi Mori and auditor Hideo Yamada.

The current president Shuichi Takayama will step down this month for his involvement in the scandal, reported Kyodo News.

Olympus spokesman Satoshi Ikuta also confirmed that all board members subject to the lawsuit would be stepping down in March or April.

Takeover target?

At close of trade in Japan on Monday, shares in Olympus were up 19.94% to close at 1,263 yen.

Shares were boosted by talk of Olympus becoming a takeover target and a report that the company is now unlikely to be delisted.

"Having nobody at the helm makes it easier for a takeover," said Nicholas Smith from CLSA in Tokyo.

Marc Einstein, technology industry manager at Frost & Sullivan, said: "With a company of this size and precedence, I don't think it's going to delist."

Mr Einstein added that while most of the company's "dirty laundry" is out in the open now, its medical device business still remains solid and is currently undervalued.

Olympus has lost almost half its market value since the scandal first came to light in October.

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