Olympus names new board members

The former boss of Olympus, Michael Woodford says it is "concerning" that a bank will be in control of the company

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Embattled camera and medical equipment maker Olympus has proposed a new board as it attempts to recover from a $1.7bn (£1bn) accounting fraud.

The company has nominated current Olympus executive, Hiroyuki Sasa, to be its new president with former banker Yasuyuki Kimoto as chairman.

Mr Kimoto was previously at Sumitomo Mitsui bank, Olympus' main lender.

Former chairman Tsuyoshi Kikukawa and two other former executives were arrested earlier this month.

The firm is being probed for an accounting cover-up after it admitted to hiding financial losses over two decades.

Mr Kikukawa resigned in October after the scandal broke out.

Meeting

Olympus plans to hold an extraordinary general meeting on 20 April at which shareholders will be asked to approve the new 11 member board.

The company says the board will have six outside directors - in addition to three current members.

Former chief executive, Michael Woodward, has criticised the new board who said it was not in shareholder interests to have a former banker as chairman because he may unfairly prioritise paying back creditors.

"Looking at capital raising, to have a representative of the bank there as the chairman will only frustrate and alienate any independent foreign shareholder, and I'm sure shareholders in Japan," he said.

"It's completely and utterly wrong."

Scandal timeline

2011

  • 20 July: Japan's Facta magazine questions Gyrus purchase
  • 14 October: Michael Woodford ousted as chief executive
  • 26 October: Former chairman Tsuyoshi Kikukawa resigns
  • 8 November: Olympus admits hiding losses
  • 1 December: Mr Woodford resigns from board

2012

  • 6 January: Mr Woodford gives up battle to take control of firm
  • 9 January: Olympus sues 19 executives
  • 17 January: Panel clears external auditors of involvement in the scandal
  • 16 February: Former chairman Tsuyoshi Kikukawa and two other former executives were arrested earlier this month.

Mr Woodward was fired from Olympus in October after raising concerns about the firms' accounts.

Since then Olympus has sued 19 former and current executives over the issue.

Former executive vice president Hisashi Mori and former auditor Hideo Yamada are the other two people who were arrested in February.

'Game over'

Mr Woodford questioned Olympus' payment of $687m in fees to financial advisers during the acquisition of UK medical equipment company Gyrus.

Although the company initially denied the allegations, it later admitted that it had been hiding losses for as long as 20 years.

The scandal resulted in the company's shares plunging more than 50% on the Tokyo Stock Exchange (TSE).

Some investors have supported the company's latest move which, they say, is in line with typical Japanese business practice.

"We know that some foreign investors are not in line with those ideas, but having said that, they have one man that is from Olympus and one who is from the supporting financial side, so to the Japanese point of view that is a good balance," said Yuuki Sakurai, head of fund manager Fukoku Capital.

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