An investigative panel has found Japan’s disgraced Olympus Corp hid up to US$1.67 billion in losses from its investors, but is likely to say there is no evidence of involvement by organized crime in the cover-up, a source said yesterday.
The panel will also stop short of recommending criminal charges against executives involved in the accounting scandal, presenting only the facts and leaving Olympus to pursue this aspect, said the source familiar with the panel investigation.
“That is up to the company,” he said.
Photo: Bloomberg
The panel’s report is due to be released as soon as today, almost two months after Olympus’ sacked chief executive, Briton Michael Woodford, went public with his concerns over its dubious accounting for a series of murky acquisitions.
The maker of cameras and medical equipment has since lost more than half its market value and risks being delisted from the Tokyo Stock Exchange, a sanction that would cut it off from equity markets and put it under pressure to sell core assets.
However, it may be able to avoid that humiliation if there is no proof of the much-rumored link between the cover-up and Japan’s yakuza gangsters — and if Olympus can meet a deadline of Wednesday next week to iron out its books and report its second-quarter results.
Olympus shares firmed 3 percent on the news, though investors remain on tenterhooks for not only the panel’s official findings, but also the outcome of a separate, joint investigation by police, prosecutors and the market regulator.
The source said the panel found that former executive vice president Hisashi Mori and ex-internal auditor Hideo Yamada had led the cover-up of losses, which amounted to ¥130 billion (US$1.67 billion) at its peak.
The panel has found Mori and Yamada then informed former president Tsuyoshi Kikukawa, the source added. Kikukawa at first publicly rejected the accusations of a cover-up when the scandal broke in October, but he later quit and the company conceded it had hid investment losses stretching back as far as two decades.
Current president Shuichi Takayama has said the firm is prepared to take legal steps, including filing criminal complaints, against those responsible for the cover-up.
Olympus has so far said that it used some of US$1.3 billion in acquisition payments and advisory fees to aid in the cover-up of the losses on its securities investments. It has declined to give details until the panel hands down its report.
The panel was appointed by Olympus and includes a former Japanese supreme court judge.
Olympus remains under joint investigation by Tokyo police, prosecutors and the Securities and Exchange Surveillance Commission. The official investigations include a police unit dedicated to fighting organized crime.
The Tokyo Stock Exchange has placed Olympus on a watch-list as a possible prelude to delisting. Even if the firm meets the Dec. 14 reporting deadline, the exchange can still delist the stock depending on the scale of its past misreporting or if it is found to have knowingly done business with organized crime.
Woodford, who blew the whistle on accounting tricks at the company after his sacking from the top job in October, has launched a campaign to oust the current board and replace it with his own team of candidates led by him as nominated chief executive.
That has set up a battle between Woodford, who was a rare foreign chief executive in Japan, and Takayama, who plans to stay on, at least in the short term, to try to get the firm back on track.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is