Tuesday, September 25, 2012

Olympus and former executives plead guilty in fraud trial

TOKYO (Reuters) - Three former executives of Japanese camera and endoscope maker Olympus Corp, and the company itself, pleaded guilty on Tuesday after being charged in connection with a $1.7 billion accounting cover-up in one of Japan's biggest corporate scandals.

Prosecutors charged ex-chairman Tsuyoshi Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada with inflating the company's net worth in financial statements for the fiscal years ended March 2007 and 2008, in violation of the Financial Instruments and Exchange Law.

"The full responsibility lies with me and I feel deeply sorry for letting down our business partners, shareholders and the wider public," Kikukawa told the Tokyo district court at the start of the trial.

"As the president of the company I take full responsibility for what happened," he added.

The three former executives had been identified by an investigative panel, commissioned by Olympus, as the main suspects in the fraud seeking to delay the reckoning from risky investments made in the late-1980s bubble economy.

The scandal was exposed last October by chief executive Michael Woodford, who was sacked by the Olympus board after querying dubious deals later found to have been used to conceal the losses. Woodford campaigned to win his job back, but has given up that bid, blaming cosy ties between management and big Japanese shareholders and citing the strain on his family.

Since then, Olympus has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s. The firm is under investigation by law enforcement agencies in Japan, Britain and the United States.

In December it filed five years' worth of corrected financial statements plus overdue first-half results, revealing a $1.1 billion dent in its balance sheet, triggering talk it would need to merge or forge a business tie-up to raise capital.

(Reporting by Antoni Slodkowski; Editing by Tomasz Janowski and Daniel Magnowski)

Source: http://news.yahoo.com/olympus-former-executives-plead-guilty-scandal-trial-013639963--finance.html

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