Olympus ponders £780m lawsuit

The imaging giant is preparing a suit to help cover damages from a £1.1bn accounting fraud that has savaged the 92-year-old firm’s finances, market cap and reputation, one source said.

The suit is likely to include current executives who failed to spot the 13-year cover-up or question exorbitant advisory fees made for acquisitions, he said.

Olympus said it would announce the contents of any suit tomorrow. It declined to comment on whether its president, Shuichi Takayama, planned to step down.

Takayama, who took the helm in October, has said he was not involved with hiding losses, and that his first responsibility was to rebuild the company’s business after the scandal wiped out 60 per cent of its market capitalisation.

However, an external panel appointed by the company named Takayama as one of six current board members in breach of fiduciary duty by allowing former chairman Tsuyoshi Kikukawa and others to thin out Olympus’s assets, the source said.

The company’s main lender and major shareholder, Sumitomo Mitsui Financial Group, has backed management and its efforts to seek a capital tie-up to shore up its finances.

Takayama replaced former president and chairman Tsuyoshi Kikukawa in October, after ousted British-born chief executive Michael Woodford blew the whistle on Kikukawa’s part in the fraud.

Woodford has dropped his bid to return to Olympus and said he would sue for unfair dismissal.

The company is likely to pick Takayama’s successor from among the three board members the panel said were not responsible for the cover-up – Masataka Suzuki, Kazuhiro Watanabe and Shinichi Nishigaki – the source said.

The panel’s report recommends that Kikukawa, former vice-president Hisashi Mori and former auditor Hideo Yamada shoulder the bulk of the damages, the source added.