Olympus admits Woodford was right on Gyrus fees


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The Independent Online

Olympus has conceded one of the central allegations from its ousted chief executive, who raised what he called "serious governance issues" at the company just days before he was sacked.

The camera-maker backtracked on its original stance, which had been that Michael Woodford was dramatically overstating the size of payments to an adviser on takeover deals. The company said yesterday that Mr Woodford's figure for one disputed payment was correct.

The admission came as investors continued to head for the exits as the share price slid for a fourth day. It fell as much as 6 per cent, before recovering to close 2 per cent lower. More than 40 per cent of the value has been wiped off the company since Thursday night.

Mr Woodford was ousted as the first foreign chief executive of the precision equipment group just two weeks into his tenure.

His dismissal came after he sent a series of letters to the board raising questions over four Olympus takeovers. He called in PricewaterhouseCoopers to study the ¥215bn ($2bn) deal for Gyrus, which questioned why the company had paid a third of the deal in fees to its adviser Axes. Normal fees for advisory work is around 1 per cent. Chairman Tsuyoshi Kikukawa said on Tuesday that the company had actually paid a sum closer to ¥30bn ($391m).

Yesterday, the company admitted the total was actually $687m in payments related to the 2008 deal, which included a buyback of preferred shares. The company maintained that there had been no wrongdoing.

JP Morgan and Goldman Sachs suspended analyst coverage of the company yesterday citing questions over the accounting practices.