Olympus top management was 'rotten': 3rd-party panel

the committee--comprising lawyers and an accountant chosen by Olympus

This alone should be a red flag. The news is out before it is presented, and the stocks are already climbing. Business as usual in Japan!

namabiru4me: It SHOULD be a red flag, but lest we forget this is a Japanese company we are talking about, so instead it will get a green light. The two former presidents will be chided and at WORST go to court and get suspended sentences, then be given well-paid jobs somewhere inside the company where it's low-profile. This is the corporate governance (or lack thereof) that the world is pointing to as a bad example, and Edano is defending. These two ex-presidents will be the fall-guys and then NOTHING will change, despite promises to be 'more transparent' and clean up the company, meanwhile they'll claim that choosing these scapegoats is proof that the company is headed in a new direction.

"Tobashi", eh?

So, do Japanese companies have more of these obviously pre-meditaded and established techniques that are designed with a sole purpose of deceiving shareholders?

The Nikkei business daily said the committee—comprising lawyers and an accountant chosen by Olympus—

Doesn't this say it all? A fair and open minded, totally impartial committee. How could anyone doubt them?

We still don't know where the money went. Short of that, any investigation is totally pointless.

Olympus panel expected to blame 2 ex-presidents for scam

After which, the 2 ex-presidents are expected to blame someone else.

Indeed, that should be a red flag but this is Japan... Ignore, head in sand...

However, the committee is likely to conclude that there is no evidence executives pocketed any illicit funds or shifted money to yakuza crime syndicates, Jiji press reported. So where did all that money go in those offshore accounts?? Poof! Gone! Vanished!! It is in someone's back pocket and they need to find out who and why.

Kikukawa needs to spend some time in jail - personally I would prefer it be in a foreign country where he can learn "our" thinking and ways.

Several Olympus deals have come under the microscope

Wonder was that a deliberate pun or not? ;) Im guessing not, but its still good.

Japan Inc cover up, COMING RIGHT UP!

It doesn't matter where the money went or what they did with it. It is still illegal. Put them in jail and make it a lesson for the rest of Japan. Do stuff properly or don't do it at all.

Yeah right, blame them but you all knew about it, how could 2 guys do this and no one else know about it... they obviously knew about the debt, how did they think it magically disappeared?

Whatever happened to a good ol' fashioned Seppuku?

Of course two ex-employees are responsible. And they are no longer with the company so let's move on, right Olympus? Nothing to see here anymore.

It's important to remember that this is an internal investigation (Red flags and all) the teller will be the several other investigations that are ongoing, international in particular and the co-operation that these receive. It's in the spot light and this **it stained report has as much believability as a TEPCO report. There is a theme developing in the corporate governance issue? And a obvious lack of charges tells me that the keystones are waiting to be told what to do! On both issues.

Olympus top management was 'rotten'

Yet they are still employed there? The word is not WAS.... the word should be IS

To the thumbs downers,

You think these ex-presidents are going to take the blame? No way. They are going to pass the blame like a red hot coal. What? We did not do anything. We did not know anything. Heck, Kikukawa was blaming Woodford from the get go. Some short memories here or what?

@Namabiru4me - losing value or gaining value at this point is part of another process not entirely connected to the news. You're right that it should be a red flag, but even hedge fund managers would (myself for that matter) grab stock in it's short form for a quick gain.

@gogogo - the two top guys are out, but like you said, there are others still in the wings, including board members that looked the other way.

@Ben_Jackinoff - I wouldn't count out Kikukawa recanting a bit of his fire. He blasted Woodford to get him out the door before any damage could be done. Now that the stink points directly at Kikukawa, and the world knows that Woodford was acting in accordance with his previous responsibilities, it would behoove Kikukawa to admit his role and save face. Passing the buck is not one of his choices, IMO.

WAS rotten? As in past tense?

Whatever happened to a good ol' fashioned Seppuku?

Seppuku is for people with honor and integrity

Kikukawa won't admit he's wrong! He tried to get rid of Woodford to stop this all from coming out. He then tried to blame the issue with Woodword on "cultural" issues. He's a snake and probably thinks he's too big to fall. He is probably thinking that because he quit, that is enough. I wouldn't be surprised at all if he pointed fingers at others. Jail him and start looking into other companies. Foreigners, investors and young Japanese are sick and tired of old Japanese guys thinking they are above the law.

Jail Kikukawa, the other former prez - and take Ozawa while they're at it!

here here ..i agree with tmarie..esp on the Ozawa point

in which Olympus has admitted paying $687 million to a little-known financial adviser based in the Cayman Islands.

This "little-known" financial adviser has been identified as such for some time now. I think it is high time AP, or some other news organization, get to work and start knowing more about this person. Or can $687 million buy anonymity?

@newsman - if it is the same adviser and his brother - whose family names begin with 'Y', then they have been exposed in the Western press, and one of them managed to avoid being convicted in another trial that did involve 'anti-social forces...

@wanderlust: Thanks for the tip, although I'm not sure about the surnames beginning with "Y". After a lot of searching, it seems the best info on these shadowy characters is here: http://neojaponisme.com/2011/10/23/a-guide-to-the-olympus-mysteries/

Can we have the little information on the little known adviser please?

http://www.digitaltrends.com/photography/zooming-in-on-the-olympus-scandal/ The Yokoo brothers. Interesting read.

http://www.digitaltrends.com/photography/zooming-in-on-the-olympus-scandal/ The Yokoo brothers. Interesting read.

The Yokoos sound sketchy and I hope someone, somewhere is looking into them!!

With all this criticism of Japan I wonder if anyone remembers Enron and Union Carbide? Real corporate malfeasance comes from the west.

Again j4p4nFtw, Me thinks your black van is double parked!

@j4p4nFTW

True, corporate corruption can be found almost anywhere; the point is, the Japanese authorities don't properly punish, nor root out the so-called rotten bit. In the west, everyone involved falls; but in Japan, a token scapegoat (and if your "lucky", a figurehead) falls, and then back to business as usual. As has been pointed out by many users here and professional commentators, Olympus needs to wipe its somewhat dirty slate clean.

So, it seems senior management knew about the losses year after year but just covered it up in order not to "upset the applecart". Sounds like Tepco. And a $687 million consultancy fee to a little-known financial adviser based in the Cayman Islands for a $2.2B deal.... where's the corporate governance???

http://www.digitaltrends.com/photography/zooming-in-on-the-olympus-scandal/ The Yokoo brothers. Interesting read.

Thank you for this. A very enlightening read.

The report slammed Olympus for its “low level of transparency and governance” and added: “Many on the board were yea-sayers and we cannot help saying the board had become a mere facade.”

But Edano keeps claiming that Japanese governance is on a par with the U.S. -- hah. The truth is that Olympus is more the rule rather than the exception in Japan, as anyone who has worked in a Japanese company knows. Shacho's are not questioned in Japan and treated like royalty by the employees, including the members of the board, who all are subservient to him, rather than the share holders. But the real question is now that this problem has been identified, will Japan do anything to correct it? For those posters who love to point to Enron as a failure of U.S. governance, that was ten years ago. And strict new laws, like Sarbanes-Oxley have been passed to try to keep such an occurrance from happening again. Will Japan do the same, or simply pretend Olympus is a one-off and continue to bury its head in the sand?

Real corporate malfeasance comes from the west.

Your kidding me? You have some real hate for anything non Japanese.

Needs more Mt. Olympus puns and Icarus flies too high references.

I guess it doesn't matter if you are an American company or a Japanese company, bad management is everywhere. I guess it is the same the world over: "Sh@#t floats to the top" sometimes.

What I can't understand, if the management at Olympus rose from the ranks and had to go through the levels of the company to get there, didn't any of them along the way pick up any moral compass in regards to not just doing what's right for the company but doing what "is the right thing to do." There can be a big difference between the two.

So can we assume then that no matter what, Japanese company men learn how to cheat and cover up at the lowe levels and if you don't get caught you will keep going higher?

This snake pit is no surprise to anyone who has done business in Japan, I'm pretty sue. Given my experience!

Pretty sure

didn't any of them along the way pick up any moral compass in regards to not just doing what's right for the company but doing what "is the right thing to do."

Japan's companies tend to lack moral compasses - they tend to rob their customers (NOVA...), disregard safety standards (TEPCO....) and lie and fire when it looks like they won't get their way (Olympus...) Anyone who has worked in Japan is not surprised by anything. Why some of the locals are is beyond me.