(Updates with Olympus comment)
By Antoni Slodkowski
TOKYO, Sept 25 Japanese camera and medical
equipment maker Olympus Corp and three of its former
executives pleaded guilty on Tuesday over charges related to a
$1.7 billion accounting cover-up in one of Japan's biggest
The scandal was exposed last October by chief executive
Michael Woodford, who was sacked by the Olympus board after
querying dubious deals later found to have been used to conceal
Revelations of the huge accounting fraud revived calls for
more outside scrutiny of its boardrooms but have failed to
trigger sweeping corporate governance reforms similar to those
introduced a decade ago in the wake of U.S. scandals such as at
"The full responsibility lies with me and I feel deeply
sorry for causing trouble to our business partners, shareholders
and the wider public," ex-chairman Tsuyoshi Kikukawa told the
Tokyo district court at the start of the trial nearly a year
after the cover-up first came to light.
"I take full responsibility for what happened."
Prosecutors charged Kikukawa, former executive
vice-president Hisashi Mori and former auditor Hideo Yamada with
inflating the company's net worth in financial statements for
five fiscal years to March 2011.
The three former executives had been identified by an
investigative panel, commissioned by Olympus, as the main
suspects in the fraud seeking to delay the reckoning from risky
investments made in the late-1980s bubble economy.
The indictment did not specify what penalties the
prosecutors would seek, but lawyers have said the former
executives could face up to 10 years in jail and fines of up to
10 million yen ($128,400). The company could be fined more than
100 million yen, according to the Japanese media.
What if any impact the company's guilty plea will have on
Olympus will depend on what sentence, including a possible fine,
the court hands down, said Tsuyoshi Oshima, a spokesman for the
medical equipment maker. That decision, he said could be several
"Lawsuits from shareholders are possible," Oshima said. The
drop in Olympus's share price has already spurred 12 lawsuits,
including 11 in Japan, he said.
Woodford had campaigned to win his job back, but has since
given up, blaming cosy ties between management and big Japanese
shareholders and citing the strain on his family.
Olympus has already admitted it used improper accounting to
conceal massive investment losses under a scheme that began in
In December, it filed five years' worth of corrected
financial statements plus overdue first-half results, revealing
a $1.1 billion dent in its balance sheet.
With its share price hit by the scandal and a hole blown in
its finances, the company has been struggling to secure funds to
cover its losses, triggering talk it would need to merge or
forge a business tie-up to raise capital.
On Tuesday, three sources familiar with the deal said rival
electronics and entertainment giant Sony Corp. was
likely to approve a plan this week to invest 50 billion yen
($642 million) in Olympus, becoming its biggest shareholder with
around a 10 percent.
($1 = 77.8750 Japanese yen)
(Additional reporting by Kiyoshi Takenaka, Reiji Murai and Maki
Shiraki; Editing by Tomasz Janowski and Jonathan Thatcher)