Woodford: discussed recapitalising Olympus with bankers

TOKYO | Thu Dec 15, 2011 2:16am EST

The 92-year-old company on Wednesday restated its accounts for the past five years and made a delayed release of its earnings for the half-year to September, showing a marked deterioration in its net asset position.

Olympus' shares tumbled 20 percent on Thursday after the release of the financial reports.

Woodford is visiting Japan this week to drum up support for his reinstatement at the firm two months after he was dismissed and subsequently blew the whistle on questionable acquisitions at the centre of the company's accounting scandal.

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Bank of Tokyo-M'bishi UFJ: support for Olympus unchanged

TOKYO | Thu Dec 15, 2011 2:16am EST

TOKYO Dec 15 (Reuters) - Bank of Mitsubishi UFJ, the main banking unit of Mitsubishi UFJ Financial Group, will keep its support for Olympus Corp unchanged, Japan banking lobby head Katsunori Nagayasu said on Thursday.

Nagayasu, who serves as chairman of the Japanese Bankers Association, is also president of Mitsubishi UFJ Financial Group, Japan's largest bank by assets.

MUFG, along with Sumitomo Mitsui Financial Group, is one of the main lenders to Olympus, which is embroiled in an accounting scandal. MUFG is also among the Olympus's top shareholders, with a 7.6 percent stake.

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Japan's disgraced Olympus says may rehire ex-CEO

1 of 2. Olympus Corp President Shuichi Takayama speaks at a news conference in Tokyo December 15, 2011.

Credit: Reuters/Kim Kyung-Hoon

By Nathan Layne and Yoko Kubota

TOKYO | Thu Dec 15, 2011 12:21am EST

TOKYO (Reuters) - Japan's disgraced Olympus Corp said on Thursday it would consider reinstating Michael Woodford, the British chief executive it sacked two months ago and who blew the whistle on a fraud that has left it weakened and in need of fresh capital.

Woodford's return would mark a dramatic climb-down by the existing board of Olympus, which had unanimously fired him in October after he had queried the firm's dubious book-keeping. The firm later admitted to uncovering a $1.7 billion fraud.

"On what will happen to Mr Woodford, it is certain that he is among the options," Shuichi Takayama, president of the maker of cameras and medical equipment, told reporters in discussing the board's options for choosing a new CEO.

But there remained serious doubts whether Woodford would indeed be chosen against other candidates for his old job.

Takayama, currently the most senior executive after several resignations since Woodford's departure, said he had no plans to meet the Englishman, who some big Japanese shareholders and lenders privately oppose, according to a banking source.

"As of now, I have no plans to meet," he said.

Takayama has said that he and fellow directors will resign soon, to make way for an entirely new board to be elected by shareholders at a meeting to be held in March or April, and that the board wants to choose its successors before it quits.

Woodford, however, has attacked the existing board as lacking all credibility, saying it has no right to choose its successors. He is assembling his own team of candidates for a new board with himself at the helm as nominated CEO, a move that raised the prospect of battle for control of the company.

In a comment likely to antagonize Woodford further, Takayama added on Thursday that some existing directors might not resign after all. So far, only a few directors have quit, including the former chairman, and the head of internal auditing.

"There is no need for those who are not found responsible (of wrongdoing) to resign," he said.

NEED FOR FRESH CAPITAL OR TIE-UPS

The next CEO and board of Olympus faces major challenges, starting with a need to repair the once-proud firm's balance sheet, which was revealed on Wednesday to be $1.1 billion weaker than had been previously disclosed in its fraudulent accounts.

Olympus shares slumped almost 20 percent after Wednesday's corrected accounts were published, with investors now concerned it might need to merge, sell assets or raise fresh capital.

Takayama said on Thursday the company was considering capital and operational tie-ups, among other options, to relieve the pressure on its balance sheet, which was shown to have a very thin layer of equity remaining after the restatements.

Olympus forecast its troubled camera business to make a loss in the current financial years, but said unit sales had grown 15 percent in the six months to end-September, from a year earlier.

The firm, whose main income-earner is its very profitable endoscope business, avoided automatic delisting from the Tokyo Stock Exchange by meeting Wednesday's deadline for producing its overdue second-quarter accounts, giving some initial relief to investors who had feared it might miss the deadline.

However, the 92-year-old firm can still be delisted if the exchange believes the accounting deceit was grave enough.

(Additional reporting by Linda Sieg, James Topham and Mari Saito; Editing by Mark Bendeich)

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Japan's disgraced Olympus says may rehire ex-CEO

1 of 2. Olympus Corp President Shuichi Takayama speaks at a news conference in Tokyo December 15, 2011.

Credit: Reuters/Kim Kyung-Hoon

By Nathan Layne and Yoko Kubota

TOKYO | Thu Dec 15, 2011 12:21am EST

TOKYO (Reuters) - Japan's disgraced Olympus Corp said on Thursday it would consider reinstating Michael Woodford, the British chief executive it sacked two months ago and who blew the whistle on a fraud that has left it weakened and in need of fresh capital.

Woodford's return would mark a dramatic climb-down by the existing board of Olympus, which had unanimously fired him in October after he had queried the firm's dubious book-keeping. The firm later admitted to uncovering a $1.7 billion fraud.

"On what will happen to Mr Woodford, it is certain that he is among the options," Shuichi Takayama, president of the maker of cameras and medical equipment, told reporters in discussing the board's options for choosing a new CEO.

But there remained serious doubts whether Woodford would indeed be chosen against other candidates for his old job.

Takayama, currently the most senior executive after several resignations since Woodford's departure, said he had no plans to meet the Englishman, who some big Japanese shareholders and lenders privately oppose, according to a banking source.

"As of now, I have no plans to meet," he said.

Takayama has said that he and fellow directors will resign soon, to make way for an entirely new board to be elected by shareholders at a meeting to be held in March or April, and that the board wants to choose its successors before it quits.

Woodford, however, has attacked the existing board as lacking all credibility, saying it has no right to choose its successors. He is assembling his own team of candidates for a new board with himself at the helm as nominated CEO, a move that raised the prospect of battle for control of the company.

In a comment likely to antagonize Woodford further, Takayama added on Thursday that some existing directors might not resign after all. So far, only a few directors have quit, including the former chairman, and the head of internal auditing.

"There is no need for those who are not found responsible (of wrongdoing) to resign," he said.

NEED FOR FRESH CAPITAL OR TIE-UPS

The next CEO and board of Olympus faces major challenges, starting with a need to repair the once-proud firm's balance sheet, which was revealed on Wednesday to be $1.1 billion weaker than had been previously disclosed in its fraudulent accounts.

Olympus shares slumped almost 20 percent after Wednesday's corrected accounts were published, with investors now concerned it might need to merge, sell assets or raise fresh capital.

Takayama said on Thursday the company was considering capital and operational tie-ups, among other options, to relieve the pressure on its balance sheet, which was shown to have a very thin layer of equity remaining after the restatements.

Olympus forecast its troubled camera business to make a loss in the current financial years, but said unit sales had grown 15 percent in the six months to end-September, from a year earlier.

The firm, whose main income-earner is its very profitable endoscope business, avoided automatic delisting from the Tokyo Stock Exchange by meeting Wednesday's deadline for producing its overdue second-quarter accounts, giving some initial relief to investors who had feared it might miss the deadline.

However, the 92-year-old firm can still be delisted if the exchange believes the accounting deceit was grave enough.

(Additional reporting by Linda Sieg, James Topham and Mari Saito; Editing by Mark Bendeich)

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Olympus ex-CEO Woodford: wants no part in breaking up firm

TOKYO | Tue Dec 13, 2011 9:01pm EST

TOKYO Dec 14 (Reuters) - Ousted Olympus CEO Michael Woodford, who is campaigning to regain his old job at the disgraced Japanese company, said on Wednesday that he wanted no part in breaking up the firm, now struggling to survive a massive accounting scandal.

Woodford, who blew the whistle on the $1.7 billion scheme to hide investment losses stretching back two decades, told a meeting with opposition lawmakers that he was ready to meet Olympus President Shuichi Takayama at any time and that he wanted to avoid a proxy fight for control of the 92-year-old maker of cameras and endoscopes.

Woodford, who arrived in Tokyo late on Tuesday for his second trip to Japan since he fled to Britain after being sacked in October, faces a battle with the current board in his campaign to return to the helm of the company.

Olympus faces a deadline on Wednesday to publish its earnings for the six months to September and will also release revised past financial statements.

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Olympus ex-CEO steps up campaign for old job as deadline looms

Olympus Corp's former CEO Michael Woodford (2nd L) speaks to a reporter upon his arrival at Haneda airport in Tokyo December 13, 2011.

Credit: Reuters/Toru Hanai

By Tim Kelly and Linda Sieg

TOKYO | Tue Dec 13, 2011 10:21pm EST

TOKYO (Reuters) - The former British CEO of Japan's scandal-ridden Olympus Corp called on its disgraced board on Wednesday to make way for his return to the top job, as the firm faced a make-or-break deadline to iron out its crooked accounts.

The maker of cameras and medical equipment, engulfed by a $1.7 billion accounting fraud, one of Japan's worst corporate scandals, must meet a Wednesday deadline to file its second quarter earnings or be delisted from the Tokyo Stock Exchange.

It also plans to submit revised accounts for past years.

Delisting would cut Olympus off from equity capital markets, putting it under pressure to sell core assets and marking a humiliating low for the 92-year-old firm, which two months ago triggered the crisis by sacking its CEO, Michael Woodford.

Woodford immediately blew the whistle on the firm's accounting problems after he was fired and is now waging a campaign to be reinstated, appealing to shareholders to support his comeback as part of a complete renewal of the board.

The board has committed to resigning over the scandal, but wants to choose its own successors before quitting, setting up the prospect of a proxy war between its own candidates and those being assembled by Woodford as part of his campaign.

"The shareholding balance is such that there is a realistic chance we could win a proxy fight," Woodford said. But he added that such a battle would cause a split between foreign and Japanese shareholders and that he hoped it could be avoided.

Some big foreign shareholders back Woodford's bid but Japanese institutional investors, although reticent, appear worried about whether he can win over the company's employees as well as his plans to turn around the once-proud firm.

Woodford said he was willing to meet Olympus President Shuichi Takayama at any time but added incumbent directors were too discredited to be in a position to choose their successors.

Woodford, who was a rare foreign CEO in Japan, also sought to soothe concerns about his plans to restore trust in Olympus.

"I want no part in selling Olympus or breaking it up," he said, adding he would not close down the firm's struggling camera business.

"People say the 'gaijin' president would shut it," Woodford said, using the Japanese word for foreigner. "I wouldn't."

Analysts have said Olympus' big and profitable medical business could be bought by a rival or private equity if it became clear the firm could no longer effectively run it.

BALANCE SHEET BLUES

Investors poring over Olympus' financial statements later on Wednesday will be looking for the scale of changes to its balance sheet and whether it will need to raise fresh equity, as well as whether auditing firms KPMG AZSA LLC and Ernst & Young ShinNihon LLC will sign off on the financial documents.

The Nikkei daily said Olympus' ex-auditor, KPMG AZSA, would give qualified approval to restated accounts for the three years to March 2009, with the qualification based on factors such as the auditor's inability to completely confirm money flows.

Ernst & Young ShinNihon would approve without qualifications all statements for periods from March 2010, the newspaper added.

Olympus shares at one point lost more than 80 percent of their value after the scandal broke in October.

Since then, an outside panel commissioned by Olympus to probe the scandal has found that the deals were part of a fraud carried out by a few executives to hide losses stemming from risky securities investments in the late 1980s. Some of these losses were disguised in the accounts as acquisition payments.

The panel found no evidence of rumored involvement by organized crime syndicates in the scheme, although Olympus remains under investigation by police, prosecutors and regulators, who are expected to step up their joint probe after the revised financial statements are announced.

Olympus shares have rallied from their lows in recent weeks on expectations that while some former executives face harsh punishment, the firm itself will avoid a delisting.

Now at about half its pre-scandal value, the stock last traded down 2 percent at 1,343 yen.

(Additional reporting by Chikafumi Hodo and James Topham; Editing by Mark Bendeich)

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