Olympus won't get extension on reporting deadline: sources
TOKYO (Reuters) - Japanese regulators will not extend a deadline for Olympus to report its financial results, sources with knowledge of the matter said, leaving the scandal-hit company with less than two weeks to correct two decades of accounting and avoid delisting.
Olympus and its auditors are scrambling to correct past earnings statements and submit its latest results after the company admitted to a cover-up of securities losses dating back to the 1990's. If they cannot meet the December 14 deadline Olympus will automatically be delisted under stock exchange rules.
As the deadline nears some stock market participants have speculated that Japan's Financial Services Agency might extend the deadline, reflecting the view that regulators are keen to keep Olympus listed to limit the blow to small investors and the markets.
The regulator has extended reporting deadlines in the past but only in cases where the company was hit by a natural disaster or some other factor seen to be out of its control.
In principle, Olympus would have had to apply for an extension by November 14, which it did not, and the regulator is not eager to break with precedent and offer leniency to a firm that cooked its books, the sources said.
"If Olympus had come clean earlier about the loss cover-up, it could have started investigating earlier and would have had enough time to meet its deadline," said one of the sources, speaking on condition of anonymity.
"A special exception will not be made for Olympus," another source close to the regulator said.
By law Olympus only has to restate earnings for the last five years. But to allow auditors to present an accurate account of present financial conditions about two decades of statements will have to be redone, auditing sources have told Reuters.
That puts the bulk of the work on KMPG AZSA LLC, which audited Olympus until 2009 when the company switched to Ernst & Young ShinNihon LLC.
Meeting the deadline will hinge in large part on how quickly a third-party panel charged with investigating Olympus' past dealings can issue its findings. The panel is expected to submit its report next week.
KMPG AZSA and Ernst & Young are working together and coordinating with the panel to ensure the process is as smooth as possible. But it remains unclear whether they will be able to finish in time, auditing sources said.
Olympus has until 5:15 p.m. (0815 GMT) on December 14 to submit its results for the April-September first half.
"There is no question this is going to come down to the wire," one auditing source said.
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