Executives admit £1.3bn Olympus cover-up

CAMERA and medical equipment maker Olympus and three of its former executives pleaded guilty yesterday over charges related to a £1.3 billion accounting cover-up in one of Japan’s biggest corporate scandals.

The scandal was exposed last October by British chief executive Michael Woodford, who was sacked by the Olympus board after querying dubious deals later found to have been used to conceal the losses.

“The full responsibility lies with me and I feel deeply sorry for causing trouble to our business partners, shareholders and the wider public,” former chairman Tsuyoshi Kikukawa told the Tokyo district court at the start of the trial nearly a year after the cover-up came to light.

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“I take full responsibility for what happened.”

Prosecutors charged Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada with inflating the company’s net worth in financial statements for five fiscal years to March 2011.

The three former executives were identified by an investigative panel, commissioned by Olympus, as the main suspects in the fraud seeking to delay the reckoning from risky investments made in the late-1980s bubble economy.

The indictment did not specify what penalties the prosecutors would seek, but lawyers have said the former executives could face up to ten years in jail and fines of up to 10 million yen (almost £100,000). The company could be fined more than 100 million yen, according to the Japanese media.

Olympus has admitted it used improper accounting to conceal massive investment losses. In December, it filed five years’ worth of corrected financial statements and results, revealing a dent in its balance sheet of almost £1bn.