TOKYO Japan's Terumo Corp (4543.T) said on Tuesday it had filed a lawsuit against Olympus Corp (7733.T), seeking damages for lost shareholder value, and escalating a tussle with the endoscope maker over a tie-up proposal.
Terumo, a medical device maker which holds a 2.5 percent stake in Olympus, announced last week a proposal to invest 50 billion yen ($640 million) in cash-strapped Olympus.
The unusual step of going public with the proposal had appeared to be a bid to rally shareholder support behind it against rival offers from the likes of Sony Corp (6758.T) and Fujifilm Holdings (4901.T).
Terumo said it would sue Olympus under Japan's Financial Instruments and Exchange Act for failing to disclose its accounting fraud before signing a business and capital tie-up with the medical equipment firm seven years ago.
Olympus allocated little over 6 million shares to Terumo through a third-party allotment in August, 2005.
Terumo, which said the deadline for filing the suit was in early August, would not disclose the amount it sought for damages.
Olympus was not available to comment.
Shares in Olympus have shed nearly 40 percent since last October, when the company's former CEO Michael Woodford blew the whistle on a decade-long accounting fraud at the firm.
The single lens reflex camera maker admitted last year it used improper accounting to conceal huge investment losses under a scheme that began in the 1990s.
Olympus is in final talks with Sony to get a roughly 50 billion yen capital injection in return for a stake, according to Japanese media reports. Terumo, as well as Fujifilm Holdings, have already publicly said they are keen on an Olympus tie-up.
In response to Terumo's offer, which included forming a joint holding company, Olympus, which also makes medical devices, said last week that it was carefully considering the proposal from Terumo, as well as other companies, and that no decision had been made.
Olympus President Hiroyuki Sasa told Reuters last month he wants to boost the firm's shareholders' equity to 10 percent of its total assets as soon as possible, from 4.6 percent as of end-March.
To do so, the firm will need to secure some 50 billion yen in fresh capital.
(Reporting by Chang-Ran Kim and Nobuhiro Kubo; Writing by Linda Sieg and Mari Saito)