TOKYO Olympus Corp's shares surged in brisk trade on Thursday after its chairman and president quit and his successor said he would explain past M&A deals at the heart of a scandal that wiped out half of the firm's market value.
Olympus's former chief Tsuyoshi Kikukawa resigned from the top posts on Wednesday saying he wanted to restore confidence in the 92-year-old company, shaken by a public stand-off with its ex-CEO over a hefty advisory fee and other past deals.
The new President Shuichi Takayama denied any wrongdoing by the firm, and the appointment of the 41-year veteran which was announced after the market close was initially greeted with skepticism by investors.
The company fired its British President and Chief Executive Michael Woodford on October 14, just two weeks after his appointment as CEO, saying he failed to understand the company's management style and Japanese culture. Kikukawa then took over Woodford's role.
Woodford in turn said he was sacked for questioning a $687 million advisory fee paid in relation to a $2.2 billion takeover in 2008, as well as other deals, and for urging Kikukawa to step down.
Olympus shares, which have lost about half of their value since Woodford's sacking, were up 13 percent at 1,242 yen on Thursday and were the most heavily traded stock by turnover, reflecting expectations that the company will shed more light on deals at the heart of the controversy.
Pressure has been mounting on the camera and endoscope maker to disclose more information on its takeover of medical equipment maker Gyrus in 2008 and on other deals.
"So far the company is just repeating that nothing was inappropriate in its M&A deals," said an analyst who said he could not be named because he had suspended coverage on Olympus. "We need more information on these advisory fees: Who was paid how much and why."
Japan's Securities and Exchange Surveillance Commission has been looking into the company since August, sources familiar with the matter told Reuters.
A senior ruling party lawmaker has also called for probes by Japan's financial and securities watchdogs and urged Olympus to explain the fees, which could undermine shareholder confidence in Japanese corporate governance.
The Olympus scandal could re-ignite debate over what critics say is a deep-seated weakness of Japanese management -- a lack of strong independent oversight of boards, which gives shareholders' rights short shrift.
Takayama, 61, joined Olympus straight from an engineering high school in 1970 and has served on the company's board since 2006 after holding several senior managerial positions.
Ex-CEO Woodford has said he was now talking to the U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office.
Woodford has identified the advisory firms involved in the Gyrus takeover as New York-based AXES America LLC and AXAM Investment Ltd in the Cayman Islands.
(Writing by Tomasz Janowski; Editing by Edmund Klamann)