A very honourable defeat: Ex-Olympus boss walks away

Japan's closed shop would never allow me to rescue Olympus, Michael Woodford tells Jim Armitage

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The Independent Online

The Olympus boss turned whistleblower Michael Woodford has launched a blistering attack on the "closed shop" in Japanese big business after abandoning his campaign to be reinstated as chief executive.

Having in effect been defeated by the vested interests of the Japanese financial establishment, he will fly back to Britain to sue for unfair dismissal.

Shortly after Mr Woodford was appointed to run the cameras and medical endoscopes giant last April he uncovered a $1.5bn (£973m) fraud there. When the Briton confronted the board, they at first stonewalled, then sacked him. Yesterday he announced he had abandoned his fightback, having realised that the Japanese financial establishment, on whom he would have relied to get the business back on a firm financial footing, would be against him even if he did persuade shareholders to approve his reinstatement.

He told The Independent: "I believe I could have won over the shareholders, because a majority are overseas and I get on very well with them. But the major Japanese institutions were not supportive.

"It would have been ahorrible situation running a Japanese company with so much debt without the support of the institutions there."

Mr Woodford added: "If there had not been this unified closed shop I could have succeeded and turned around the company. But all the way through this whole affair, there has been not one single word of criticism for Olympus, or its board, from any of the Japanese institutions. It is quite extraordinary – Alice in Wonderland."

Speaking from Tokyo, the man named as The Independent's business person of the year for 2011 condemned the cosy relationship between Japanese banks, shareholders and company executives which blocked his return. He attacked the way the big corporations hold big stakes in each other, hindering change and independent oversight.

"It's so damaging because it means nobody can criticise anybody," he said. "Japan has to realise that these cross-shareholdings served a purpose in the aftermath of the Second World War when Japan was rebuilding itself, but now it is totally impractical. In Japan it is impossible to have a hostile takeover, which is the ultimate check on a board."

Speaking of his decision to abandon his campaign, Mr Woodford added: "I feel a deep sadness and melancholy but, to be honest, a sense of peace. I know my wife will not have to suffer any more from the stress this situation has caused us and our family."

Mr Woodford also said that he had received huge support from smaller shareholders in Japan, where the Olympus scandal has been dubbed "Japan's Enron" in some quarters.

"People come up to me in the street out here and thank me for what I've done," he said. "People in my team at the hotel room last night were in tears because they knew we had a good chance of winning the vote. But winning was not the issue. It was what the situation would have been like after that victory that was the problem."

He said he would now take some time out "to find my equilibrium" before taking on his next job. Asked if he would take another corporate role in Japan, Mr Woodford said: "Believe it or not, I wouldn't rule it out. I love this place."

However, he said he was "open to offers" for a big job back in the UK.

Headhunters take note: The Woodford CV

Age: 51

Education: King David's High School and Millbank College of Commerce, Liverpool.

Career: Trainee at Lucas Aerospace; salesman at Cadbury; joined Olympus UK agent Keymed at the age of 21, becoming head of UK at just 29.

Went on to senior positions in the US before running Europe, Middle East and Africa regions.

Promoted to CEO in April 2011.

Family: Spanish wife, Nuncy, and two children.

Lives: Southend-on-Sea, Essex, and in London.

Interests: Campaigner for road safety (for which he was awarded an MBE) and human rights.

Sailing his Norfolk Gipsy boat.