Olympus executives have their day in court

Three former executives of Japanese camera and endoscope maker Olympus and the company itself have admitted taking part in a $1.7 billion accounting cover-up.

Ex-chairman Tsuyoshi Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada were charged with inflating the company’s net worth in financial statements for five fiscal years to March 2011, in violation of the Financial Instruments and Exchange Law.

Kikukawa told the Tokyo district court at the start of the trial that the full responsibility lay with him and he was deeply sorry for letting down Olympic’s business partners, shareholders and the wider public.

The three were identified by an investigative panel, commissioned by Olympus, as the main suspects in the fraud seeking. It appears that the three were trying to delay a reckoning from risky investments made in the late-1980s bubble economy.

What was tragic was that the whistleblower on the whole sham was the new British CEO Michael Woodford, who was sacked by the Olympus board after querying the dodgy deals.

Woodford campaigned to win his job back, and said that there was a cosy tie between management and big Japanese shareholders which blocked him.

Olympus is under investigation by law enforcement agencies in Japan, Britain and the United States.

At the end of last year it filed five years’ worth of corrected financial statements plus overdue first-half results, revealing a $1.1 billion dent in its balance sheet.