Japanese executives at centre of Olympus fraud avoid jail
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Wednesday 03 July 2013
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.”
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