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Panel to release findings of Olympus scandal probe

Mon, 12/05/2011 - 6:45pm
YURI KAGEYAMA - AP Business Writer - Associated Press

A third-party panel investigating an accounting cover-up at Olympus Corp. that has become one of Japan's biggest corporate scandals is to release its findings later Tuesday.

After initially denying wrongdoing, the Tokyo-based camera and medical device maker admitted it hid investment losses dating back to the 1990s with questionable acquisitions and exorbitant fees for financial advice.

The murky transactions were first brought to light in October by former CEO Michael Woodford, 51, who called on the entire board to resign and bring in outside directors for more transparency. Instead, he was sacked.

Olympus risks being listed from the Tokyo Stock Exchange if it doesn't rectify past filings with regulators by reporting revised earnings by Dec. 14.

The panel, headed by a former Supreme Court judge, was set up by Olympus last month after Woodford's public criticism grew into a public relations disaster for the company.

Olympus' bookkeeping is now under investigation in Japan, the U.S. and Great Britain. Woodford has met with authorities in all three countries.

The company has since admitted to accounting irregularities, and blamed former President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and ex-auditor Hideo Yamada, all of whom have resigned.

Woodford, a Briton who worked at Olympus for about three decades and became a rare foreigner to head a major Japanese company, returned to Japan late last month to meet with prosecutors, police and regulators.

The scandal has cast a harsh light on Japanese corporate governance, which has been criticized as lagging global standards.

Last week, Economy Minister Yukio Edano defended Japan, saying its corporate governance standards were on par with the U.S. or even better. He didn't specify any cases, but there have been a string of accounting scandals at major U.S. companies, including Enron and AIG.

Olympus stock, which at one point lost 80 percent of its value after Woodford's whistleblowing, has recovered over the last three weeks, and surged Tuesday amid optimism the company may avoid delisting.

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