The fall-out from one of Japan’s biggest corporate scandals has continued today with the arrest of seven men including former Olympus executives and bankers in relation to a $1.7 billion accounting fraud.
Tokyo prosecutors arrested ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said. A couple of bankers were also arrested, as well as men suspected of helping hide the huge investment losses through complex mergers and acquisition deals.
The whole scandal was exposed back in October by then-CEO Michael Woodford who was sacked by the Olympus board after questioning certain accounting practices. Woodford initially sought to get his job back but abandoned the bid last month saying that cozy ties between management and Japanese shareholders meant he was unlikely to regain his position.
Ex-President Tsuyoshi Kikukawa, who was one of seven men arrested over the $1.7bn fraud at Olympus
Responding to the arrests, Woodford said: "After going to hell and back, this is a day to remember." He plans on writing a book about his experiences.
The fall out from the scandal will continue in April at a shareholders meeting when at least six of the 11-member board are set to resign, including President Shuichi Takayama.
Earlier this week, Olympus predicted a £260m loss for the financial year 2011, though its medical equipment division is still making a profit, while its digital camera business continues to be loss-making.
Olympus’ share price has fallen by 50 per cent since the scandal was revealed last October, and the shares fell a further 2.4 per cent following the arrests in Tokyo last night.