Probe into Olympus Advisers’ Fee Pushed
Japanese camera and medical equipment maker Olympus Corp. has paid questionable amount to two advisory firms in relation to a 2008 acquisition, deserving of a legal and regulatory probe.
This was according to a report from accounting firm PricewaterhouseCoopers commissioned by Olympus‘s former president Michael C. Woodford, who was ousted by the board for not heeding warnings from the company’s chairperson, Tsuyoshi Kikukawa, though Woodford would deny this justification.
PricewaterhouseCoopers recommended filing charges of false accounting, financial assistance and breaches of duties by the board.
Olympus allegedly paid $687 million to two advisory firms after winding up the buyout for Gyrus Group Plc at $2 billion. This means the advisory fee took up more than one-third of the purchase price.
Woodford’s report describes the cost of the buyout as “extremely significant”, giving enough cause for concern.
However, Olympus Executive Vice President Hisashi Mori said the report emanated from mere “speculation,” according to Bloomberg News.
The report declared a lack of evidence pointing to improper conduct, but maintained that the claims cannot be dismissed given the amount of money involved and some of the unusual decisions.
After the controversy, shares of Olympus plummeted 22 percent to 1,589 yen in Tokyo trading, losing more than $3 billion in market capitalization over the previous trading, on top of the 18 percent slide of the company’s stock right after it ousted Woodford.