* Olympus, Gyrus charged for misleading, deceiving auditor
* First UK court hearing on Sept 10
* Olympus shares drop as much as 6 pct
* Japan courts have already found 3 former execs guilty
By Sophie Knight and Kirstin Ridley
TOKYO/LONDON, Sept 4 Britain's fraud prosecutor
has charged Japan's Olympus Corp and its British
subsidiary Gyrus with misleading or deceiving an auditor,
dragging a $1.7 billion accounting scandal back into the
spotlight two years after it first erupted.
Olympus, once one of Japan's most venerable companies, saw
its shares and profits plunge after its former British CEO,
Michael Woodford, alerted prosecutors and the media to a series
of shady payments after being fired for questioning company
accounts in 2011.
Since then the medical equipment to camera maker has swung
back to profit, Sony Corp paid 50 billion yen ($500
million) to become its biggest shareholder this year and the
company in July raised $1.2 billion in a share issue.
Olympus said earlier on Wednesday it expected Britain's
Serious Fraud Office (SFO) to press charges, sending its shares
down as much as 6.3 percent, although the stock recovered to end
the day down 2.9 percent at 2,798 yen.
Three former Olympus executives, including former chairman
Tsuyoshi Kikukawa, were found guilty by a Japanese court in
July. They were handed suspended jail sentences while the
company was fined 700 million yen ($7 million) for violating
The SFO said Olympus faced one charge of making a statement
to an auditor which was misleading, false or deceptive, while
Gyrus, whose purchase by Olympus in 2008 was coupled with an
inflated advisory fee, faced four charges. The SFO said it was
focusing on alleged offences between April 2010 and March 2011.
The first UK court hearing will take place on Sept. 10.
Woodford said in an email it would be inappropriate for him
to comment about a criminal prosecution, but noted: "It is in
the public domain that following my dismissal from Olympus in
October 2011, on my return to London I immediately visited the
SFO to advise them of my concerns and provided them with all the
information in my possession.
"Shortly after this, in November 2011, the SFO opened a
formal investigation and the charges against Olympus Corporation
and its UK unit Gyrus Group Limited is the culmination of this."
GREEN'S FIRST CORPORATE PROSECUTION
SFO head David Green, who has overhauled the cash-strapped
agency since taking the helm in April last year, has been keen
to bring more companies to book - a tough task, given the SFO
has to show company bosses are complicit to prove corporate
Stephen Parkinson, a lawyer at Kingsley Napley, noted the
Olympus charges would be the first corporate prosecution brought
under Green's leadership.
"This is a significant development for the SFO," Parkinson
said. "There is little case law on sentencing for companies, but
a recent consultation ... suggests that a fine on any conviction
in this case could be very significant."
An Olympus spokesman said the company was also still under
investigation by the U.S. Department of Justice.
Olympus's board resigned in the wake of the scandal, while
the three former executives and the company itself pleaded
guilty last September to charges related to a cover-up.
Olympus bought Gyrus, a medical equipment firm, for $2
billion in 2008. In addition to paying the world's largest
advisory fee - equivalent to one-third of the purchase price -
Olympus later wrote down the value of the deal along with a
handful of other acquisitions.
The deal was part of a scheme to cover up investment losses
dating back as much as a decade or more.
SFO chief Green is under pressure to deliver convictions and
restore faith in an agency which, under predecessor Richard
Alderman, has been accused by lawmakers of a "catalogue of
errors and poor judgement".
The SFO's notable successes - such as last year's conviction
of fraudster Asil Nadir 19 years after he fled the UK - have
been overshadowed by failures, such as a botched probe into the
Tchenguiz property moguls that left it nursing a 300 million
pound damages claim.
The agency's largest and most complex current investigation
is a global inquiry into the rigging of Libor benchmark interest
rates, over which three individuals have been charged to date.