The chairman of Olympus resigned yesterday as the company tried to draw a line under damaging allegations raised by its ousted chief executive, Michael Woodford. Yet the Briton warned the choice of successor would "just make things worse".
Now another regulator has launched an investigation into the precision equipment and camera maker's takeover activity, this time in its home market. Three of Olympus's largest shareholders have already called for an independent committee to scrutinise the $687m (£431m)in fees paid to a financial adviser on its purchase of the British medical group Gyrus. The fees, which are usually about 1 per cent of a transaction, were equivalent to a third of the deal price.
The Japanese company said that Tsuyoshi Kikukawa had quit as chairman, chief executive and president after a board meeting yesterday morning, although he will stay on as a director. His departure was prompted by stakeholder concerns over "the recent series of media reports and fall in the stock price", the company said.
Shuichi Takayama, who was already on the board and joined Olympus in 1970, was appointed representative director and president in Mr Kikukawa's place.
Mr Woodford told The Independent that the latest twist was "bizarre", adding: "Kikukawa has stepped down for an existing board member who sees nothing wrong with the huge fees paid to the advisers on the Gyrus deal. This is just making a bad situation worse."
He said the decision to appoint Mr Takayama "insulted the intelligence" of those calling for change and that it was a "ludicrous way to manage a major corporation". The company needed to"bring in a genuine outsider to replace Kikukawa, or reappoint myself," Mr Woodford added. "The appointment of a board member at the top does not take out the heat from the situation." He has previously pledged to return if the entire board is ousted.
Olympus's share price tumbled by a further 10 per cent yesterday after gaining 8 per cent on Tuesday. More than half of the value of the company has been lost since Mr Woodford, its first foreign boss, was fired less than a fortnight ago. The axe fell just two weeks into his reign as chief executive and eight months after he was named president.
Olympus's board said there had been a culture clash. But Mr Woodford denies there was any such issue, instead claiming that he was fired after raising "serious governance concerns" about four transactions, including the Gyrus deal. The questions over the deals have prompted speculation that Japanese organised crime syndicates could be involved. Mr Takayama yesterday denied that Olympus's advisers had any connection to such "anti-social forces", saying: "I am absolutely not aware of any such thing."
Now the Japanese Securities and Exchange Surveillance Commission is scrutinising the deals, and deciding whether Olympus made adequate financial disclosures. The US FBI has already started checking the Gyrus deal.
Mr Woodford has also passed documents, including emails and an independent review of the fees, to the Serious Fraud Office in London.
Mr Woodford said: "These latest events will just damage the company further and create a lack of confidence among investors. This needs to be sorted out quickly. The future of the employees needs to be safeguarded."