Follow the link for more information. The Olympus scandal was precipitated on 14 October 2011 when British-born Michael Woodford was suddenly ousted as chief executive of international optical equipment skandal Forex Olympus Corporation. Apparently irregular payments for acquisitions had resulted in very significant asset impairment charges in the company’s accounts, and this was exposed in an article in the Japanese financial magazine FACTA and had come to Woodford’s attention.
The group employs close to 40,000 people around the world. During the 1980s, many Japanese corporations relied on investments to bolster dwindling profits, particularly in its exports which had been eroded by a strong yen. 1 billion on the value of its investments after the investment bonanza ended. In June 1998, Olympus was subject of market rumours that it had suffered sizeable trading losses on derivatives which caused its shares to plunge by 11 percent. The rumours were emphatically denied by Olympus, which subsequently announced record profits. 45 billion investment in emerging market bonds.
4 billion during this period under the stewardship of Kikukawa, the company’s aggressive strategy of external growth was not without criticism. British-born Michael Woodford was an Olympus veteran of 30 years, and previously executive managing director of Olympus Medical Systems Europa. Woodford said that he asked Hisashi Mori and some confidants about the Facta report, and stated also that at a lunch meeting in August with Kikukawa and Hisashi Mori, Olympus’ compliance officer, Kikukawa revealed he ordered staff not to tell Woodford about the allegations because Woodford was “too busy” dealing with other matters. Kikukawa dismissed the article as “tabloid, sensationalist journalism”. On 1 April 2011, Woodford was promoted to the post of president and chief operating officer, replacing Kikukawa and becoming the first ever non-Japanese chairman of Olympus. COO, “the Board have been extremely pleased with the progress made under Mr.
Woodford’s leadership in this role, which has exceeded the expectations at the time of his appointment. Woodford himself was soon to realise that his appointment to CEO was in name only. Woodford’s promotion was announced through a press statement without calling a news conference. The press release, which was full of praise for Woodford, mentioned his success in cutting costs and presented him as the “new global face of Olympus”. If the intention of the promotion was to deter Woodford’s questions, it did not have the intended effect. Woodford has largely diverted from the rest of the management team in regard to the management direction and method, and it is now causing problems for decision making by the management team.
Hence, judging that realisation of the 2010 Corporate Strategic Plan with its slogan of “Advancing to the Next Stage of Globalisation” would be difficult to achieve by the management team led by Woodford, all the board directors attending today, except for Woodford himself who could not participate in the voting due to special interest, unanimously resolved the dismissal from his office of the representative director. Olympus press release: “Olympus Corporation Resolved Dismissal of President Michael C. Kikukawa convened an emergency board meeting on 14 October, and then, arriving late, cancelled the circulated agenda and asked the board to consider removing Woodford from his post of chief executive. After Woodford’s removal, Kikukawa was re-appointed president and CEO of Olympus.
One week later, he accused Woodford of having created “a gang” of direct reports that circumvented Mori, his supposed immediate subordinate. Olympus Executive Vice-President Hisashi Mori said the company might sue Woodford for releasing internal information to news media. The past acquisitions mentioned in the media were handled with the appropriate evaluation and procedures These transactions were in no way improper and we are setting up an external panel of experts to examine and report on this acquisitions activity. However, it later admitted that “the business prospect diverged from the assumption we had at the time of the investment.