The Real Cost of ‘Choosing Truth Over Self' 2012 Cliff Robertson Sentinel Award Recipient Michael Woodford

March 13th, 2012

By Dick Corroza
March/April 2012

He couldn’t turn away. “It’s as if you’re walking along the street, and you see someone being murdered,” says Michael Woodford, the former chief executive officer and president of Olympus Corporation, the global manufacturer of cameras and medical equipment. “You don’t want to be there, but you have to do the right thing and testify.”

Woodford’s determination to force Olympus’ board to answer questions about a decades-long effort to cover up unknown investment losses with admitted false accounting of more than US$1.7 billion, eventually cost him his job, made him fear for his life and gave his wife night terrors.

For “Choosing Truth Over Self,” the ACFE will honor him with the 2012 Cliff Robertson Sentinel Award at the 23rd Annual ACFE Conference and Exhibition June 17-22 in Orlando, Fla.


Woodford, 51, an Olympus employee for more than 30 years and a British citizen, had worked his way up the executive ranks. In 1981, he joined KeyMed, a U.K. medical-equipment unit of Olympus. In 2008, he became executive managing director of Olympus Europe Holding GmbH.

On April 1, 2011, he was appointed the first non-Japanese president and COO of the company. In July, he read about some of Olympus’ suspicious acquisitions in FACTA, a small Japanese financial journal.

FACTA, in its August edition published on July 20, said that Olympus had acquired from 2006 to 2008 three small companies — Altis, a medical waste recycling company, Humalabo, a facial cream maker, and News Chef, which makes plastic plates and containers for microwaves — for US$773 million, but wrote down most of their value within the same fiscal year. The publication said that all three companies continued to post losses.

During an Aug. 2 lunch with Tsuyoshi Kikukawa, chairman of the Olympus board, Woodford confronted him about the FACTA allegations. The chairman told him the article was just simply “tabloid, sensationalist journalism,” and he needn’t worry about it. When Woodford asked why he hadn’t been informed about the suspicious acquisitions, he said that Kikukawa told him that it was a Japanese domestic issue, and as president, he was too busy to be bothered by it.

On Oct. 1, Woodford was also appointed CEO. After FACTA followed up the story in its October issue, released Sept. 20, he wrote a letter to company officials — the first of six — expressing his concerns.

In the first letter, dated Sept. 23, to the Olympus group compliance officer, Hisashi Mori, and copied to the members of the board, he wrote: “I have carefully gone through the translation of the latest [FACTA] feature … and whilst already concerned about the content of the July edition, this further article has only added to my anxiety.”

In that letter, he requested details of the Olympus’ murky acquisition of the three obscure and unprofitable companies. He also wanted answers about the acquisition in 2008 of Gyrus Group Limited — a British medical equipment maker — for U.S. $2.2 billion.

Woodford wrote that he was concerned that Olympus had issued more than $600 million in preference shares “directly to AXAM Investment Limited, a company registered in the Cayman Islands, which is described as ‘the portfolio manager for AXES Investment Limited LLC.’ ” Woodford wanted to know why Olympus had paid AXAM so much money to apparently “advise” Olympus on the acquisition of Gyrus. Woodford quotes a KPMG report, which stated that Olympus hadn’t accounted for the shares given to AXAM, and ” … in our opinion proper accounting records have not been maintained.”

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