Olympus ex-CEO pursues the $687 million question


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I read on the BBC that Woodford has had to take police protection in the UK. Now this article mentions possible links to organized crime, so the protection makes sense. With over 50% of the company value lost and the massive interest from the financial market, I can't see Kikukawa being able to sweep this under the carpet anymore.

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Perhaps those investigating everything would like to look in Kikukawa's house for offshore account numbers and in his phone to find out who he keeps company with. I don't know if we can start pointing the finger at the yaks. The old men in this country are a greedy bunch and like their money a lot. I don't think all are mixed up with the yaks but certainly do some shaddy things.

Kikukawa needs to tep down ASAP and come clean. If he doesn't, this is the end of the company. I can't see how they will recover.

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Two Japanese bankers working on Wall Street (Hajime Sagawa and Akio Nakagawa) are now under FBI investigation in relation to this case. The FBI is looking into the bankers' shady practices in engineering Olympus's $687 million payout to the sham Cayman Islands company that disappeared soon after the deal was closed.

This is past the point of no return now. It will be hard for the Japanese authorities to ignore, no matter how closely the Olympus execs

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because they didn’t realize when I left, I had taken electronic copies of everything, which are now with media organizations around the world.”

Errmm, correct me if I'm wrong here. But isn't that kind of illegal in the context of your employment contract? Imagine if we all take electronic copies of our employers confidential files and hand them to (no, not law enforcement officers or statutory authorities) the media?

And I’m the person who would have to sign the accounts.

Well theres a lie from Woodford. The deal in question was concluded in 2008. Woodford was promoted around 6 months ago....

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$687 million Wow! Some fat cats got very rich here. VERY RICH. Michael Woodford's a brave guy standing up to this and taking it all the way!

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Would love to be a fly on the wall at the next AGM of shareholders.

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Woodford obviously meant he would have had to sign the accounts going forward, in his role as president and CEO. He would therefore need to be sure that the past accounts had a solid basis in fact. Certainly not a lie.

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One could argue about the legality of Woodford's going to the media with the evidence. But that is the only reason we are all talking about it now, and it was a very effective way to force the company to focus on these extraordinary charges. Not that the company has responded in any serious way yet; hence the impact on the share prices. Woodford did also of course go to the financial authorities in the UK and Japan. In fact he went to the UK authorities before he went to the media.

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It takes a wolf to catch a wolf. To protect the sheep you must kill the Wolf.

It's David and Goliath when it comes to Japanese companies. If you've never been to court against a big company let me fill you in. The company will blatantly lie. Those who stand to gain will openly lie in court. There's not contempt here. There's no punishment.

This is the most EPIC wrongful termination suit of the year. The fact is this.....if you feel that you are at a shady company, then you better take notes. You had better keep copies of everything. You have an iPhone, you better be James Bond. If you don't it's their word against yours. Record calls, conversations. You have to expose them in a lie in court if you want the judge to roll with you. Their lawyers are busy trying to do damage control now.

It's the same as if you were getting a divorce. If you wife cheats and she gets caught, her main goal will be to eliminate as much evidence as possible, as will her lawyer. She will claim you stole her diary, invaded her privacy on her phone and that is how you discovered she was cheating and a Japanese court will support her objection.

Judge: All evidence that was found in her mobile phone will NOT be accepted by the court due to the means by which it was obtained. (The truth, with everybody knowing it's the truth GONE) Please proceed.

Olympus is going to make this case go away real quick. I believe Mr. Woodford will win any wrongful termination suit. Most likely Olympus will cut a deal. All evidence will be considered inadmissible and nothing will happen to Olympus executives here in Japan

In conclusion: Don't expect any jail time here in Japan. Mr. Woodford will win his case for an undisclosed settlement. However, the U.S FBI won't let it rest. A separate investigation will proceed and I expect anyone representing Olympus in the U.S will hand over documents and testify against Olympus Japan.

They seriously need to get Mr. Woodford into protective custody. It's too much money.

The glass ceiling just got thicker though. Dishonest companies will be scared to hire foreigners who seem a bit too honest.

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the 3th paragraph states an incorrect amount. it wasn't 20 bilion, it was over 2 billion. hence the big blowup over the compensation being 1/3 of the total value of the takeover.

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that should be 4th paragraph

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And what is unfortunately getting lost in all of this brouhaha is that Olympus has a large group of dedicated, experienced, and very talented scientists, engineers, and front-line development and manufacturing people whose lives and livelihoods are going to suffer because of management misdeeds. More than shareholders, even, they're the ones with a real stake in the future of the company (and who have made the biggest contributions to whatever success it's had), and they can only stand by and watch as these people at the top make a mockery of everything in which the rank-and-file has taken so much pride.

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shirokuma: exactly. so that is why it is of the utmost urgency to get rid of the entire board as fast as possible and sort the company out. THey have a world class endoscope business and a struggling consumer camera business but still one with a brandname. Plenty of value there. Diversifying into other medical fields is not crazy. Diversifying into skin cream and plastic bento bako is crazy. Destroying value by pouring money into a deep dark black hole is craziest of all.

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This story is featured in the Business section of Japan Today. — but it looks like it is about time to transition it over to the Crime section.

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I too feel sorry for your average olympus employee, must be feeling pretty low.

I hope the thieves at the top are prosecuted & then they shud hire Woodford back(if he will accept) & go from there, now that wud be something to behold!

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At first I thought it was just another ego driven foreigner complaining about his loss of job but the more I looked into it, I understood that the Olympus board was full of fraudster and they fired the guy because he looked into the money flow. In 2007, Olympus bought the English based company Gyru and paid 700million dollars as an advisory fee to an company called AXES and AXAM. AXAM disappeared 3 months later.(STRANGE?) In 2008, Olympus bought 3 companies with the same address which revenued just over17 million in total. They bought these company for total of 800 million dollars. They bought 3 companies that generates 17 million dollars in sales for 800 million dollars. Now that's insane.

Apparently when Woodward became the CEO of Olympus, he did not know of the above information so he started to look into it in July. I'm with ya Woodward!!!

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"Fired for failing to understand Japanese cooperate culture". Good, I've had a hearty chuckle and big smile on my face for several minutes hearing that old chestnut trotted out again. Keep 'em coming JT. How about, we Japanese are one with nature? Haven't heard a few of these oldies since the wind got knocked out of their economic sails and they've realized the awful truth of swaggering around with high-handedness in the 80s was going to come back and bite them on the bum.

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nutsagain Your comment is not really relevant to the topic... Youre just stating your hate for the culture or something like that..

-7 ( +0 / -7 )

Really? Oh ... so if one is critical it equates to hatred? Dear me, someone on this forum has a problem.

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The 'advisor' on the three Japanese deals was owned by the brother of a senior Olympus executive in charge of making investments. Another incredible coincidence. The same advisor also happened to hold equity interests in the three companies which were listed as being located at the advisor's offices!

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Hiroko Tabuchi has a good New York Times article here that is eye opening:

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" The 'advisor' on the three Japanese deals was owned by the brother of a senior Olympus executive in charge of making investments. Another incredible coincidence. The same advisor also happened to hold equity interests in the three companies which were listed as being located at the advisor's offices! "

The coincidences keep piling up! Now, what are the odds for this one?

-1 ( +0 / -1 )

What are the odds indeed. I think we are more likely to be struck by satellite debris falling to earth.

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olympus may be a good stock to buy in a few weeks. lets see how far the stock price falls. yippeeee.

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Good stock to sell now, just put in a stop loss and stick to it incase it has already bottomed out.

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Proof once again that the concept of fiduciary responsibility has no place in many boardrooms in Japan. Amazing. These companies want to compete globally, and even have global investors buy their stock, but still run the companies in the "Good Old Boy" manner of Japan Inc. Are they that ignorant, or is its arrogance?

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wall st., organized crime, and off shore accounts.

it's almost too ridicules to be true.

hopefully the fbi can nail these cretins, and take it all back, with interest and penalties, and having these scambags making bid ones out of little ones on the jari michi farm for a good number of years.

and hopefully there were some japanese laws violated as well, so that they can be prosecuted here, too.

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I think it unlikely that the board are so stupid as to invest in loss making companies over and over again or pay such ridiculous sums for advice alone. At the same time, trusting as I am of Japanese old men, it seems unlikely there is a board-room full of old geezers wanting to purchase retirement castles, or high class prostitutes for themselves. I can see no reason why organised crime would be able to force them to siphon off this much to them. So where is the money going? An alternative explanation....Since Olympus makes most of its money in the health market, supplying large numbers of hospitals with endoscopes, in high value contracts made by a small number of health ministers and or health ministry bureacrats, I wonder how Olympus have managed to be so persuasive over the past decade that they sell more endoscopes than their next three competitors combined. This scandal could get a lot bigger.

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I still don't get it. Why didn't this Woodford bloke just arrange himself a redundancy? I'm certain Olympus would have paid him a decent redundancy deal when he presented them with the facts. Probably enough towards a decent retirement and a good reference. It could all have been argued behind closed doors. So why the need for him to take confidential information and pass it on to the media? That's why something smells very fishy about this Woodford.

-1 ( +0 / -1 )

I think it's called greasing the palm, and from the looks of it it is very evident that this is the case with Olympus

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