Fears for Olympus increase as it faces delisting

Picture has not been pretty at the maker of precision equipment since it fired its chief executive

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The Independent Online

Olympus's future has been thrown into doubt as it faces the fallout of the worst corporate scandal to have hit Japan in years, as the share price plunged again and it may be forced to delist from the Tokyo Stock Exchange after 62 years.

The company has been in turmoil since it ousted chief executive Michael Woodford just two weeks into his reign for raising "serious governance concerns". The pressure ratcheted up this week as the company admitted wrongdoing for the first time and now faces a police investigation in Japan.

The share price dropped for the third day in a row, closing more than 17 per cent lower. More than 80 per cent of the company's value has been wiped off since Mr Woodford was fired.

The precision-equipment maker may be removed from trading altogether after it revealed it was likely to miss the deadline for filing its first-half earnings and was put on an exchange watchlist. The company, which delayed publication after setting up an independent committee to scrutinise a series of controversial transactions, has until 14 December to file its accounts, or will be delisted.

Olympus said it would publish its financial results as soon as it receives the investigation reports from the third-party committee. "The company is fully committed to giving its utmost effort to be able to file... by 14 December," it added. It admitted on Tuesday that it had used advisory fee payments and other funds to cover losses going back to the early 1990s.

The company did not comment on the move by the Tokyo Metropolitan Police to launch an investigation into the cover-up of losses, which Olympus admitted had been taking place for two decades. The police have demanded to see accounting documents relating to the controversial transactions. The country's financial regulator, the Financial Services Agency, is also set to scrutinise the company and possibly its auditors. The company is already under scrutiny by the US Federal Bureau of Investigation and the Securities and Exchange Commission. The Serious Fraud Office in the UK is also considering an investigation.

Mr Woodford was fired in October after raising the alarm to fellow board members over the record $687m advisory fee paid as part of the $2bn transaction for Gyrus. He also queried three other deals. The company continues to claim he was ousted because of a culture clash.

He has repeatedly stressed his desire to return and salvage the company he worked at for 30 years, "as long as the shareholders call for it".

Several major investors have done just that, though so far only non-Japanese companies have commented. On Wednesday, Baillie Gifford, which holds about 4 per cent, called for his return. Partner Elaine Morrison said: "What Olympus needs now is a thorough clean-up, and we believe Michael Woodford is the best man for the job." David Herro, of Harris Associates, was also supportive.

Ms Morrison called for all of the directors and employees linked to the wrongdoing "to be dismissed and have their ties to the company severed", adding that the current management had been "discredited".