SFO will take Japanese camera giant Olympus to court over ‘false accounts’

Olympus paid $2 billion (£1.3 billion) for Gyrus and ran up the world’s biggest takeover advisory fee

The Serious Fraud Office today said it will prosecute Japanese camera and medical scanners giant Olympus over the fraud that saw chief executive Michael Woodford sacked for whistleblowing.

The SFO said it will also prosecute Gyrus, a British medical equipment company Olympus bought in 2008. The takeover was one of the key scandals uncovered by Woodford just weeks after becoming chief executive in 2011 that led him to expose the vast corruption at the heart of the multinational.

Olympus paid $2 billion (£1.3 billion) for Gyrus — a high price — and ran up the world’s biggest takeover advisory fee, equivalent to a third of the value of the deal. Companies typically pay about 1 per cent-2 per cent in fees.

Olympus has since admitted the fee, of more than $600 million, was a fraud, disappearing into a Cayman Island fund. The deal was one of several takeovers used to cover up investment losses sustained over more than a decade.

The SFO will accuse Olympus and its Gyrus division of falsifying accounts in the financial years of 2009 and 2010. Olympus shares fell more than 6% in Tokyo on the news, before closing down about 3 per cent.

Three Olympus executives in Japan, including former chairman Tsuyoshi Kikukawa, were given suspended jail sentences for their part in the cover-up. The firm was fined 700 million yen (£4.5 million). After initially  issuing a denial over the Gyrus case in November 2011, Olympus a week later admitted its wrongdoing.

Olympus today said it was unclear how long the prosecution might last or how large any potential fines may be because of the lack of precedents for such an SFO move of prosecuting companies rather than individuals.

It also confirmed that it is still under investigation by the US Department of Justice.

Woodford, who was the first Westerner to rise to the top of a Japanese company, fled Tokyo for the UK on the day of his ousting, fearing a potential threat from Japanese yakuza gangs. He contacted the Metropolitan Police and Serious Fraud Office  when he arrived in London, and handed over documentation to prove his allegations.

Olympus has been trying to put the scandal behind it since the replacement of its entire board. Although the Japanese financial community appeared to close ranks against Woodford to block his return to the helm, it has since returned to profit. Sony paid 50 billion yen  earlier this year to become Olympus’s biggest shareholder.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
Sport
footballLive! Chelsea vs West Ham kicked off 10 Boxing Day matches, with Arsenal vs QPR closing the action
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all