By Mari Saito
TOKYO Dec 15 Shares in Japan's
scandal-ridden Olympus Corp slumped almost 20 percent
on Thursday after it corrected its accounts to reveal a
dramatically weakened balance sheet, stoking talk that it might
need to merge, sell assets or raise fresh capital.
The maker of cameras and medical equipment ironed out its
accounts on Wednesday, unwinding a 13-year book-keeping fraud
that came to light in October, and showing that its net assets
were $1.1 billion less than it had previously disclosed.
"The stock has been overpriced but after the company came
out with their numbers yesterday, it was time for shareholders
to decide whether to hold on, or dump the shares," said
Masayoshi Okamoto, head of dealing at Jujiya Securities, adding
that a recent rally was largely due to short-term speculation.
"A lot of people are disposing of their shares while the
price is still inflated," he added.
Olympus avoided an automatic delisting from the Tokyo Stock
Exchange by meeting Wednesday's deadline for producing its
overdue second-quarter accounts, giving some initial relief to
investors who had feared it might miss the deadline.
But the focus has since turned to the true financial state
of the 92-year-old firm and whether the large misstatements it
had made in its previous accounts might be sufficiently large to
still leave its listing status in doubt. The exchange can decide
to delist if it believes the deceit was grave enough.
Investors want to know how the firm will recapitalise and
whether there are plans to sell its struggling camera business,
and not least of all who will actually run Olympus in future,
given its existing board has committed to resign soon.
Olympus shares were down 15 percent at 1,117 yen, after
hitting a low of 1,056 yen. The stock has lost more than half
its value since the scandal erupted in mid-October, when Olympus
sacked its British chief executive Michael Woodford who then
blew the whistle on the company's dubious book-keeping.
Since then, two top Olympus executives were found to have
masterminded a $1.7 billion scheme to hide investment losses
from investors and to have used acquisition payments in the
cover-up. These executives have since resigned.
Woodford, now campaigning to get his old job back and
assembling his own team of candidates for a new board, said on
Wednesday he would move fast to recapitalise Olympus.
He said he favoured private equity or a rights issue over a
strategic alliance, which would rob Olympus of its independence.
But rights issues, where existing shareholders are entitled to
buy additional shares on a pro-rata basis, are rare in Japan.
Olympus President Shuichi Takayama has said he may sell
assets or accept a capital tie-up to bolster the capital base.
Olympus has been dogged by rumours of bid interest from
rivals, such as fellow endoscope makers Fujifilm and
Hoya, or from private equity the scandal broke.
The Tokyo exchange said after the announcements that it was
keeping Olympus on its watchlist for possible delisting.
Some of the restated accounts also came with qualified
opinions from auditors, with KPMG AZSA LLC noting it had been
unable to confirm all the money flows involved in the fraud.
In addition to the immediate financing concerns over
Olympus, the company also faces a possible proxy battle. The
existing board wants to choose its own successors before
quitting, potentially rivalling Woodford's comeback campaign.
Olympus will brief reporters on its revised accounts and
Woodford will hold a separate news conference later on Thursday.
The Nikkei daily said Olympus would announce that it had
chosen former Asahi Kasei Corp president Shiro Hiruta
to head a reform panel that would give guidance to company board
members on important management matters as well as advise on how
to improve Olympus' corporate governance.