By Mariko Yasu
Feb. 27, 2012
Olympus Corp. (7733) proposed an 11-member board to replace President Shuichi Takayama and other directors following the Japanese camera maker’s admission of a 13-year cover-up of investment losses.
Hiroyuki Sasa, 56, head of marketing at the medical systems unit that is now Olympus’s biggest earner, was nominated as president, the Tokyo-based company said in a statement today. Shareholders will vote in April on the nominees, who include Yasuyuki Kimoto, a former executive at main creditor Sumitomo Mitsui Financial Group Inc. (8316), as chairman.
Overseas investors including Southeastern Asset Management Inc. and Harris Associates LP have criticized the role of current executives in proposing a new board, saying there needs to be a clean sweep of management to restore confidence. An outside panel in December reported a culture of “yes men” at Olympus that failed to stop senior executives funneling money through offshore vehicles to hide the losses.
“A new management drawn from internal officials and a former banker wouldn’t look likely to ring significant changes at Olympus,” Yoshikazu Higurashi, an analyst at Deutsche Bank AG in Tokyo, said before the announcement.
Shareholders are scheduled to vote on the new board April 20. While Memphis, Tennessee-based Southeastern, with a reported holding of 5.1 percent of Olympus stock, and Chicago-based Harris, which holds about 4 percent according to filings, may oppose the proposed board, no alternative candidates have emerged as yet.
Former Olympus Chief Executive Officer Michael Woodford dropped his plan to put forward a new slate of candidates and fight for control of the company in a proxy battle. Woodford’s public questioning of past acquisitions after he was fired in October forced Olympus to admit to a $1.7 billion accounting fraud, prompted a criminal probe of the company and led to the dismissal of senior management implicated in the cover-up.
Olympus slid 3.3 percent today to 1,373 yen, narrowing its gain this year to 36 percent. The stock has plunged 45 percent since the Oct. 14 dismissal of Woodford, its first non-Japanese president.