By, Russell Lynch
25 September 2012
Former directors of scandal-struck Japanese camera maker Olympus were facing up to 10 years in jail today as they pleaded guilty to a $1.7 billion (£1 billion) accounting cover-up.
The pleas are a vindication for former chief executive Michael Woodford, who was sacked when he blew the whistle on dubious deals used to conceal huge losses nearly a year ago. Woodford has given up his campaign to win his job back, blaming family strain and the cosy ties between management and Japanese shareholders.
At the beginning of the trial at Tokyo’s district court, former chairman Tsuyoshi Kikukawa said: “The full responsibility lies with me and I feel deeply sorry for causing trouble to our business partners, shareholders and the wider public. I take full responsibility for what happened.”
Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada have been charged with inflating the company’s worth in financial statements for five years to March 2011. The trio had been identified by an investigative panel as the main suspects in the fraud, which sought to delay the reckoning from risky investments made in the late-1980s bubble economy.
Reports in Japan say the executives could face up to 10 years in jail and fines of up to 10 million yen (£79,000). The company could be fined more than 100 million yen. The scandal has revived calls for more outside scrutiny of its boardrooms, but failed to trigger sweeping corporate governance reforms similar to those introduced a decade ago in the wake of US scandals such as Enron and WorldCom.
Sony is set to approve plans to invest 50 billion yen in cash-strapped Olympus this week in return for a 10% stake, becoming its largest shareholder.