The Japanese establishment closed ranks around the disgraced former bosses of the Olympus cameras giant today, refusing to jail them for one of the biggest corporate scandals in the country’s history.
Famously, the $1.7 billion fraud resulted in the firing of its whistleblower chief executive, Briton Michael Woodford.
Despite the prosecution seeking jail sentences of up to five years for former chairman Tsuyoshi Kikukawa, vice-president Hisashi Mori and audit officer Hideo Yamada, the trio all got suspended sentences. Olympus itself was fined the equivalent of £4.6 million for the scandal, which at one stage wiped $7 billion off the value of the company as shares collapsed.
The scandal and the resulting lack of tough action against those involved has caused huge damage to Japan’s reputation abroad.
The executives had all pleaded guilty, but Tokyo District Judge Hiroaki Saito spared them jail, saying they had merely inherited the frauds from previous managements. “Kikukawa and Yamada succeeded in a negative legacy and weren’t involved in the decision-making.,” he said. “They were distressed and didn’t benefit personally from hiding losses. Mori followed their orders.”
Woodford, whose book about the scandal, Exposure, is published in paperback tomorrow amid an advertising blitz on the London Underground, discovered the fraud within a few weeks of being made chief executive.
He went public with his discovery after Kikukawa and the board refused to end the cover-up, instead voting unanimously to fire him.
Woodford said after today’s verdict: “The lessons of this sad tale should be obvious to anyone who is paying attention, and I do so hope that people in Japan are paying attention.”