Ex-Olympus executives sentenced for fraud
Former Olympus chairman Tsuyoshi Kikukawa and two of his deputies were sentenced Wednesday in Tokyo for their roles in a massive accounting fraud that almost brought down one of Japan's largest electronics companies.
Hiroaki Saito, a judge in Tokyo's District Court, handed down suspended jail sentences to Kikukawa, former board director Hideo Yamada and a third executive, Hisashi Mori.
Kikukawa and Yamada received three years in jail, suspended for five years. Mori was given two and half years, suspended for four years. The judge also ordered Olympus to pay a fine of million yen.
If the former executives meet the terms of their probation, it is unlikely they will serve any jail time. All three had pleaded guilty.
Related story: Something is rotten in Japan
Although lawsuits are still pending, the sentencing should be one of the final chapters in a saga set off in October when former Olympus CEO Michael Woodford blew the whistle on $ billion in suspicious payments made by the company.
Related story: At Olympus, drama like a boardroom novel
Woodford, a rare outsider in Japan's cloistered corporate culture, had risen t
Tsuyoshi Kikukawa was born in and went on to join Olympus, a firm that mainly specialised in optical instruments, in Kikukawa championed digital photography and ran the team that released Olympus's first digital camera in This was a success and digital cameras became key to the business. Kikukawa was then promoted, serving successively as managing director, president and chairman.
What was the scam?
The rise in the Japanese yen in the s created problems for many Japanese technology firms, including Olympus since its costs were in yen and its revenues in dollars. Kikukawa's predecessor, Toshiro Shimoyama, indulged in financial speculation to make up the difference, which resulted in large losses. After changes to Japanese accounting rules made it hard directly to conceal those losses, the company sold the worthless assets to shell companies, which were then bought in for large amounts of money. This allowed Olympus to write off the losses as "goodwill" (the difference between the cost of acquiring a company and its assets). Around $bn in losses were hidden in this way.
What happened next?
In April , Olympus hired Michael Woodford as its CEO, the firm's first non-Japanese lea
Olympus scandal: Former bosses to pay $m over fraud
Six executives sacked by Japan's Olympus have been ordered to pay more than half a billion dollars in damages after a massive accounting fraud.
The camera and medical equipment firm brought the case against ex-chairman Tsuyoshi Kikukawa and 15 others.
A Tokyo court found Kikukawa and five others liable for $m.
The ruling comes comes six years after former chief executive Michael Woodford exposed his colleagues for falsifying accounts to conceal losses of $bn.
The scandal was one of the biggest financial frauds in Japan's history, but Kikukawa and two other executives who pleaded guilty never went to jail. Instead, they were given suspended sentences of up to three years.
An Olympus spokesman declined to comment, saying the former employees could appeal against the ruling.
One of the six men found liable by the court has since died, but his family could still be held responsible for his share of the damages, according to the AFP news agency.
Olympus cameras on sale in Tokyo, Japan. Six former Olympus executives have been collectively charged with $m worth of damages related to a scandal that came to light in
Six years ago, it emerged top executives at camera manufacturer Olympus had falsified accounts to conceal losses of more than $m in one of the biggest financial frauds in Japan’s history. The scandal has now culminated in a $m fine, which has been charged jointly to six individuals who were implicated in the cover-up.
The defendants include five former high-ranking executives of Olympus, as well as the company’s former chairman, Tsuyoshi Kikukawa. While one of the six individuals has since died, the fine will be passed on to his heirs.
While one of the six individuals has since died, the fine will be passed on to his heirs
The Olympus scandal came to a head in when then-CEO Michael Woodford confronted the board regarding his concerns over suspiciously large payments related to acquisitions. Following the challenge, Woodford was promptly dismissed by the board. An investigation into the incident revealed a long-running cover-up effort dating back to the s, in which losses of $bn were concealed from
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