Olympus: Woodford quits board, as panel prepares report

November 30, 2011

Michael Woodford, former President and Chief Executive Officer of Japan’s Olympus Corp. has now resigned his non-representative position on the company’s board, according to a report today from press agency Reuters.

Company Chairman Tsuyoshi Kikukawa, Executive Vice President Hisashi Mori, and corporate auditor Hideo Yamada all resigned from the board last week. All three men had previously stepped down from their management roles in the company. Woodford had previously been stripped of his other roles at the company, after launching an investigation into Olympus’ 2008 purchase of a British medical equipment manufacturer and several smaller, unrelated Japanese firms. Olympus has since revealed that it hid losses sustained in the 1990s, and has admitted that funds from the 2008 purchases were used in an attempt to cover up these earlier losses.

Upon stepping down from his position on the Olympus board, Woodford has again stated his desire to see shareholders replace the remainder of the board. In a statement issued from New York, where he was said to have met with officials from the Federal Bureau of Investigations, Woodford further stated that he was working on a plan which he intends to present to stakeholders, including the proposed makeup of a new board for the company. The plan would reportedly include Woodford’s own return in a senior management role.

A separate Reuters report suggests that Olympus is also faced with a tight deadline for its second-quarter report, which must be submitted by December 14th. Failing that, the company would be automatically dismissed from the Tokyo Stock Exchange. Before the report can be prepared, Olympus must first receive the result of a third-party committee’s investigation into the affair, which media reports suggest may be imminent. A brief statement issued by the company earlier today indicated that Olympus still intends to file the 2Q financial report before the deadline.

One more article of note from Reuters suggests that, while the committee’s report may open the way for criminal proceedings, action is unlikely before the new year. The committee, headed by former Supreme Court justice Tatsuo Kainaka, recently stated that it had not yet uncovered anything linking organized crime syndicates to Olympus’ past corporate acquisitions, and it is believed that its report will not attempt to apportion legal responsibility for any past misdeeds.

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