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Olympus scandal triggers Japan shareholder activism

23 Comments
By Harumi Ozawa

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“Japanese businessmen try to smooth over issues slowly. They seem to believe it is the way not to hurt anyone’s interests. But they don’t necessarily think about the interests of shareholders.”

By milking the company dry for the last 22 years, that we know of! Another reason no investor outside of Japan should even bother.

3 ( +3 / -0 )

Ah, but don't those silly outsiders understand that it's only through these interlocking cross-shareholdings that companies can rack up serious amounts of debt without being challenged in the slightest. Once you show that the emperor has no clothes -- that companies have been cooking the books while institutional shareholders looked the other way -- you will start the unraveling of Japan's financial legerdemain. And then where will it stop? Not before it reaches all the way to the government -- the selfsame government that has spent oodles of money, and paid for it with bonds that financial institutions were, um, "encouraged" to buy.

And when they go down, they will all go down together.

5 ( +5 / -0 )

Olympus scandal triggers Japan shareholder activism

What? Only one shareholder bringing a lawsuit against Olympus?

If that is the case, then the headline doesn't match the content of the article. Wouldn't it be more apt for the headline instead to read: "Olympus scandal fails to trigger Japan shareholder activism"?

4 ( +4 / -0 )

Too little, too late.

2 ( +2 / -0 )

Japanese businessmen try to smooth over issues slowly. They seem to believe it is the way not to hurt anyones interests. But they do not necessarily think about the interests of shareholders.

This is why it is foolish for anyone to invest into a Japanese company. Sure, a lot of Japanese companies produce great things, but they fail to understand the concept of shareholder value. It's all far too grey and corrupt for my liking..

2 ( +3 / -1 )

Oh, how I wished Mr Woodford did not launch his brilliant idea. He's just swimming against the tide. And now he can't get back his job... well, who's the last to laugh?

-10 ( +0 / -10 )

The biggest mistake Olympus has ever done was to hire Woodford for the CEO position in the first place who doesn't even know the company culture well enough. After all the trouble he has caused, he expects to have his job back? And sueing the company now because he didn't get enough votes for his CEO position again? This guy is full of greed thinking only about himself. He has put all the Olympus staff in jeopardy. The recession is bad as it is and he has made it even worse. The only thing he has caused was to make a bad reputation for foreigners running companies in Japan. Now lesser trust and jobs will be given to foreigners from Japanese companies thanks to him.

-15 ( +0 / -16 )

d-pump,

you really need to go back & read up on what olympus did, its top management screwed the company, shareholders, & employees, customers etc, not Woodford, he simply pointed out the problem once he was aware of it, WHICH WAS HIS DUTY,HIS JOB! Comprende!

8 ( +8 / -0 )

And gee wudnt it be nice to see the press in Japan try to follow up on where & to who that $687million went to, seems like the press & the authorities just done care, silly me of course they dont care for anyone except themselves & fellow croonies

3 ( +3 / -0 )

I think you may have been listening to too much jp propaganda mr d-pump. Woodford had been with Olympus for 30 years, count them that's 30 years. I think he may have had a slight insight into how the company ran. What is better? He remains silent about the THEFT AND CORRUPTION IN THE BOARD and possibly be blamed later or to come out with the truth and show people that the corruption and theft had happened and were on going?

I bet you were one, along with many many narrow minded locals who said "oh he's a forigner, that's why he couldn't truely understand Japanese ways and had to be removed"

Well now those forigners clearly understand Japanese business practices. COVER UP, Lie, cheat and steal and when found out blame the scape goat... Or just say a "gomenosai" and bow deeply then all is forgiven.

Olympuss board swindled billions that their stock holders lost!! That is theft and do you think kikukawa will receive anything more than a suspended sentence and a stupidly small fine?

I'm so sick of hearing how bad Woodford was, he tried to save Olympus!! I think you'll find it was mitsui who supported the present president who it also turns out was involved and is having to "gomenosai" bow and resign.

5 ( +5 / -0 )

But they don’t necessarily think about the interests of shareholders.”

Amen to that. And that won't change for decades, as there is no mechanism in Japan for teaching the concept of fiduciary responsibility there. The Japan Inc. model is institutionalized there, including in the business schools. And, unfortunately, twenty-six well-intentioned lawyers are never going to change that.

And, seesaw,

well, who's the last to laugh?

IMO, it won't be Olympus or the current board. Their stock price has tumbled and they will find it very difficult to get it back to where it was previously, at least for several years. Plus they are likely to have to pay Woodford a significant settlement to avoid a public airing of his lawsuit. And, it won't be Japan Inc. either, since if Woodford's case does come to trial, the shady business practices and debt-ridden company model would be exposed to the light of day. And, even if it doesn't, these companies are going to find it very, very difficult to raise foreign capital in the future, as the lack of corporate governance in Japan has raised serious concerns. The idea that a board would leave in place a president it is suing for fraud is simply incomprehensible to outsiders.

0 ( +0 / -0 )

I do know what Olympus has been up to and know that Woodford have been at the company for 30 years,otherwise I woudln't have posted like that. Yes, the top management screwed the company. And sure, what he did was right in the good world that is, but realisically, all major companies worldwide are corrupted, and leaders at that level keep their mouth shut and take it to the graves if they really liked the company. Leaders at that level will be expected to handle things calm. There must've been a better way to solve the problem rather than Woodford going to the media about it and put Olympus's brand name in the dark spotlight and having all employees in the company been frowned upon from people outside. He has to be more considerate. Buggerlugs, your name isn't Michael Woodford by any chance?

-7 ( +0 / -7 )

Now a group of 26 activist lawyers is looking to change Japan’s closed corporate society as the scandal rocks global confidence in the business governance standards of the world’s third-largest economy

I am glad to hear this. Japan, a closed corporate society? You've got it right.

This is not just for a Olympus mess. Think about the TEPCO, how the nuke mess could have been avoided if the business governance was properly implimented.

-2 ( +0 / -2 )

This is just going to provide an opportunity for the sokaiya to rejoin the game under the guise of watchdog activism.

0 ( +0 / -0 )

SOKAIYA; a trouble maker is out.

All these lawyers understand the legal trouble issues while "sokaiya" is just a mediocre trouble maker. You need to make sure on that for going forward for a real change.

-1 ( +0 / -1 )

There must've been a better way to solve the problem rather than Woodford going to the media about it and put Olympus's brand name in the dark spotlight and having all employees in the company been frowned upon from people outside.

D-Pump -- Precisely. The board could have done the RIGHT thing and fired the then-president instead of Woodford when he brought the fraud to its attention. Then Olympus' brand name would have never been in this "dark spotlight" as you call it. And, as regards corporate CEO's keeping corruption quiet and "taking it to their graves", you have never apparently heard of Sarbanes-Oxley. So, when a new CEO in America takes over he immediately brings any questionable accounting to light, or otherwise he will face criminal penalties. Better to throw his predecesor under the wheels of the bus. It would not go on for decades as it did at Olympus.

1 ( +2 / -1 )

D-Pump, it is minds like your that are killing Japan. Japan needs to change. And honest businesses and government is one huge step in right direction. What benefits are there to secrets, liars, corruption and cover-ups? How does this help the people of Jpan exactly?

1 ( +1 / -0 )

The biggest mistake Olympus has ever done was to hire Woodford for the CEO position in the first place who doesn't even know the company culture well enough

Before talking about corporate culture, all Japanese corporations need to learn ETHICS and SOCIAL RESPONSIBILITY. All US major S&P top 50 probably have a mandatory annual on-going training on these issues from the top senior executives to the bottom.

-1 ( +0 / -1 )

The other day, all the people in my class were forced to watch the documentary "Smartest Guys in a Room." Real messed up stuff going on within that cancer of a company Enron. But what surprised me is that all the people pointed fingers at one another and were quick to disassociate any relationship with the firm. But even so, before the sh*t hit the fan everyone was loving the company for its elevating stock prices. Everyone was guilty in the whole scheme. The government, the shareholders, financial institutions and partners, auditors (in house and external), the employees, the management and so forth. I would think the same situation applies to Olympus, where everyone were delighted to do business even when the books were cooked the whole time, only for everyone to jump ship when the titanic started to sink.

1 ( +1 / -0 )

But what surprised me is that all the people pointed fingers at one another and were quick to disassociate any relationship with the firm.

It did not surprise me at all. Japanese are raised as followers in conformed society "Wa" with non critical thinking and non problem solving skills. They are not raised as leaders.

Many of them are not truth speakers. I see a difference between gaijin posts and Japanese posts on JT.. Some of Japanese are very good and I enjoy them very much. Others I just skip reading as it does not say anything.

-1 ( +1 / -2 )

@globalwatcher

You know I was referencing Enron the whole time right? I am having trouble how you managed to stereotype an entire nationality and assume that they are unintelligent ala "non critical thinking" and "non problem solving skills" Please reread my post. When the money is good, people turn into idiots. Greed is rather a universal thing and when you're making money even with irregularities, it is hard to pause a moment and "ask why" (no pun intended) things are going so great. Clearly, you think Japanese opinions are worth less than gaijin posts, which I think is a bit interesting, but I respect your opinions.

0 ( +0 / -0 )

tokyokawasaki, Yes, the business companies in Japan has to change, honest businesses is ofcourse the right step forward, but take a look at the situation in Japan. The recession is so big that companies have to do whatever it takes to stay afloat as these people have a family to support. Just imagine how difficult it is now for the current Japanese Olympus employees when they try to go for new jobs. Their CV will say 'Olympus' and employers will automatically associate with scandals. Maybe in the US or Europe they wouldn't care about that, but this is Japan, we look at it from a different angle. Woodford might have done the right thing, but he is also responsible of ruining the employees future. What would you choose, whatever it takes to support your family, or trying to be a hero and jeopardise many hundreds of employee's future?

-1 ( +0 / -1 )

Many of them are not truth speakers. I see a difference between gaijin posts and Japanese posts on JT.. Some of Japanese are very good and I enjoy them very much. Others I just skip reading as it does not say anything.

I don't read the posts the way you do (gaijin posts or Japanese posts). There are Japanese with different background here; Japanese born and raised in Japan, half Japanese/half American, born in Japan with Japanese parents but spent most of their time overseas... and vice versa. I read posts more like who says what (not by nationalities). I find some of them are not truth speakers and some of them are very good and I enjoy them very much no matter what their nationality is.

0 ( +0 / -0 )

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