Last month, in the original article titled The Continuing Woes Of Olympus, I discussed the turmoil at the company following revelations about massive cover ups of losses associated with questionable acquisitions. This article is an update to that story, to let you know where things stand now.
I’m going to present the details that have emerged since the first article chronologically to give you an idea of how things have developed.
UK Serious Fraud Office announces it will investigate Olympus for evidence of financial wrongdoing.
Woodford meets US FBI and Department of Justice officials to discuss the case.
Olympus announces, with remarkable haste, that the independent panel it set up to investigate its actions has found no evidence of Yakuza links.
Former Olympus CEO Michael Woodford tells Amateur Photographer his vision for Olympus’ camera business. Woodford indicates that he would keep the camera business going, but talks about the difficulties in the consumer electronics market. He reiterates his desire to return as CEO.
My personal interpretation on Woodford’s view of the camera division is that he would preserve it as long as it was profitable, but would very likely jettison it if it began to make losses. I don’t get the impression that he sees cameras as a core part of the Olympus business, or that he knows how to build a successful camera business. It is difficult to work out if he knows why the PEN series of cameras have been so popular, or if he just thinks it was a lucky break.
Woodford also questions the independence of the panel Olympus set up. The speed with which they have denied the presence of organized crime lacks credibility given the time required for forensic accounting, he states.
Woodford arrives in Tokyo to meet authorities and for board meeting.
After meeting Japanese officials, Woodford says he is more confident of a thorough investigation than he was before.
2 Olympus board members (Tsuyoshi Kikukawa and Hisashi Mori) quit, together with the Company Auditor (Hideo Yamada). These resignations are the latest in a steady trickle that began when the scandal broke.
Woodford thanks members of Olympus who signed an online petition for his reinstatement. He continues his campaign to take over as CEO again.
Olympus announces that it will, review its future focus, but denies that the future of the camera division is under threat.
Woodford resigns from Olympus board. He cites concerns over how the new board will be formed, and announces he will make his own proposals.
Olympus releases the findings of its independent probe into the company, which, as widely expected, finds no evidence of links to organized crime.
However board members, Investment Bankers, and Accountants are all blamed for the 13 year scandal. The estimated $1.7bn total irregular losses puts pressure on the authorities to prosecute.
Woodford continues to call for the resignation of all board members from the period of the scandal.
Reports state that the Olympus board will stand down at the next shareholder meeting. Early guesses as to the date of the meeting say that late February is the earliest possible.
The Japanese press reports that officials from The Tokyo District Prosecutor’s Office, The Metropolitan Police Department, and the Securities And Exchange Surveillance Commission will visit Olympus offices next week to investigate allegations of wrongdoing.
December 14th (Today)
Reports state that Olympus has met today’s deadline to submit financial reports to the Japanese stock exchange. Failure to meet the deadline would have resulted in Olympus’ shares being delisted, further destabilizing the company.
Asahi Shinbun reports that the external auditors appointed to oversee the accounts, KPMG and Ernst & Young, will sign off on the accounts.
The threat of delisting has not disappeared entirely, but it has significantly abated. Shares have recovered value, from their lowest value of 20% pre-scandal levels to 50% earlier today.
So that’s how things stand for now, Olympus as a company may now be in a position to begin the recovery process. That may start in earnest when the next shareholder meeting occurs, and the board changes.
Olympus have a rich history in camera manufacturing, which we can hope will continue for a long time to come. Today they announced a new 12-50mm m4/3 lens for their PEN cameras. It’s a power zoom (you push a button to make it zoom) which means it’s designed with video in mind, and features extensive weather sealing. i’ll talk a bit more about power zooms in another article.