Of all the issues swirling around leaders of Japan's Olympus Corp., its ousted president and chief executive returns again and again to the $687 million question.
"$687 million!" Michael Woodford said, his anger rising in a weekend interview. "For what? And to whom?"
Woodford put those questions to the company's chairman, and was fired. Armed with a mass of documents, Woodford continues to wage a one-man campaign to find out what happened. The case has become a rare public clash between a substantial Japanese company and its former president, a Westerner.
Olympus has defended the payment as "appropriate" compensation to AXES/AXAM for advice on the $20 billion takeover of a British company, medical instruments maker Gyrus Group, in 2008. Payments to advisers in takeovers typically are 1 percent to 2 percent of the price.
After first claiming that the payment was nearer $390 million, Olympus last week confirmed the $687 million figure.
It said it paid $244 million for advisory services on the Gyrus deal, which included $177 million in preferred shares in Gyrus. When Olympus later bought back the shares, the company said, the value had risen to $620 million.
"And what for? There's nothing there," Woodford said. "They gave us a 'strategic look'; all they've done is put the names of five or six health care companies on a piece of paper."
Woodford's public questioning of that enormous sum, most of it paid to something called AXES/AXAM in the Cayman Islands, has rocked the company. Shares in Olympus have lost half their value since Woodford was dismissed on Oct. 14. On Monday, they were down another 10.7 percent at 1,099 Japanese yen.
"And they stand up and try to defend it," Woodford said. "And they lied, because they didn't realize when I left, I had taken electronic copies of everything, which are now with media organizations around the world."
Some of Olympus' shareholders have joined in the agitation for answers.
Woodford, 51, worked for Olympus for three decades, initially at British subsidiary KeyMed. Later as executive managing director of Olympus Europa Holding GmBH, he was credited with raising profits in the region by cutting costs and restructuring.
In April, he became president of the company, a rare case of a Westerner at the top of a Japanese company.
When he was offered the presidency, Woodford said he saw Olympus as a company which "had been managed placidly in many ways."
"I had inklings that people were incompetent. I had inklings that things were not always managed as commercially as they should be," he said.
He also thought Olympus had paid a high price for Gyrus, but only heard about the $687 million payment in July, when the Japanese financial magazine Facta broke the story.
When he returned to Japan in early August after a vacation, Woodford said he sought a meeting with company chairman Tsuyoshi Kikukawa and Hisashi Mori, the group president in the group management office, to discuss the Facta article.
"As soon as I raised it, the atmosphere in the room changed quite markedly, and I felt very uncomfortable by the way they acted," Woodford said. "The allegations were serious and substantial. And I'm the person who would have to sign the accounts. They were evasive, you could feel the utter resentment that I had raised this."
In September, Woodford said he was further alarmed when Facta published a second article connecting the Gyrus deal with "anti-social elements," a euphemism for organized crime and racketeering.
In a series of six letters, Woodford said he made it clear he would resign if he did not get answers about his concerns.
"I was drawing my own conclusions that this was inherently wrong, and we're going to need to bring in forensic accounting teams, completely independent of this management, to go through everything which has taken place with M&A (merger and acquisition) activity in the Kikukawa era," he said.
Kikukawa, 70, joined Olympus in 1964 and has been on the board since 1993.
On Oct. 1 Woodford was made chief executive officer, succeeding Kikukawa who continued his other role as chairman.
At the time, Olympus said its board was "extremely pleased with the progress made under Mr. Woodford's leadership" and that his performance had exceeded expectations.
According to Woodford, he was then already at loggerheads with Kikukawa and Mori, and his promotion was agreed after "a day of screaming and shouting" in a meeting with the two men.
Woodford has been described as a whistle-blower, but he said the true hero is the source who provided the information to Facta magazine.
He has called for Kikukawa and the rest of the board to step down.
"The game's up, you know," Woodford said. "You can't justify that figure."