The scandal at Olympus took another twist yesterday when a major investor advisory group told shareholders to reject the camera company's newly restated accounts, and vote against two new board nominations in case they decide to sue the firm in the future. With Tokyo prosecutors still investigating Olympus officials on suspicion of their role in a £1.1bn accounting fraud, ISS Proxy Advisory Services warned shareholders that accepting the restated accounts could undermine prospective lawsuits.
The accounts will be put up for vote at an extraordinary general meeting on 20 April. Olympus had hoped to use the meeting to move on from the accounting fraud.
But that looked unlikely after ISS said: "Supporting this resolution is an endorsement of the company's financial statements, and would not be appropriate at a time when the findings of investigations by public entities are not available. Given the unusual circumstances surrounding Olympus, it would not be advisable for shareholders to support this proposal."
ISS also told shareholders to reject Olympus's nominations for new president Hiroyuki Sasa and chairman Yasuyuki Kimoto, saying Mr Sasa was not well qualified and Mr Kimoto was too closely associated to one of the firm's biggest creditors, Sumitomo Mitsui Banking Corp.
The group believes Mr Kimoto and another director, Hideaki Fujizuka, who has links to Bank of Tokyo-Mitsubishi, another major creditor may not act in the interests of Olympus shareholders. "Given the size of the outstanding loans SMBC and BTMU have with Olympus, neither Kimoto nor Fujizuka can be expected to act in the best interests of ordinary shareholders," ISS said.
The camera group is currently suing 19 former executives, including its present president, Shuichi Takayama, for damages worth 3.61 billion yen.Reuse content