Feeds

Olympus gets government grilling after firing nosy Brit boss

Japanese prime minister cites multimillion dollar 'irregularities'

Internet Security Threat Report 2014

The Japanese prime minister has called for clarification from Olympus’ board of directors over hundreds of millions of dollars in fees paid out during recent takeovers – deals the company’s short-lived British CEO claims he was fired for investigating.

In an interview with the Financial Times, PM Yoshihiko Noda said the board must clarify why it paid such high fees in its activities - money which appears to have been paid into tax havens. Noda also said that Olympus may bring other Japanese firms into disrepute.

It's highly unusual for such a senior political figure to raise concerns about corporate life, but the Olympus case has many people nervous.

“What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism,” Noda said. “Japanese society is not that kind of society.”

At issue is the $687m paid out in fees after the 2008 purchase of the Gyrus Group, a British medical device manufacturer, for approximately $2bn. The amount far exceeds the usual fees paid to consultants in such a deal, and have raised fears of financial irregularities.

In April, Olympus appointed its first non-Japanese president, Michael Woodford – a British 30-year company veteran – and then promoted him to CEO six months later. However, two weeks after being unanimously voted in, he was unanimously voted out – a decision he said stemmed from him asking too many questions about the fees paid in the deal.

“Michael C. Woodford has largely diverted from the rest of the management team in regard to the management direction and method, and it is now causing problems for decision making by the management team,” the company said at the time.

However, the questions Woodford raised have not gone away, and the company has found itself under increasing scrutiny. Last week, Woodford’s replacement as president, Tsuyoshi Kikukawa, was forced to step down as speculation over the affair grew and Olympus’ share price almost halved, wiping billions from its value.

Southeastern Asset Management, which owns about five per cent of Olympus’ stock, has now also chimed in, with a letter of concern it sent to the board on 20 October but has not made public. It said that it is very concerned by the Woodford allegations and requested the board minutes covering the transactions and details on why so much was paid in fees.

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.