Thu, Dec 15, 2011 - Page 10 News List

Olympus submits earnings report and avoids delisting

AFP, TOKYO

Former Olympus chief executive Michael Woodford drinks tea as he speaks before Japanese lawmakers at the headquarters of the opposition Liberal Democratic Party in Tokyo yesterday.

Photo: AFP

Scandal-hit Olympus Corp yesterday filed its delayed earnings report to the Tokyo Stock Exchange, avoiding an automatic delisting that would have wiped out the value of the 92-year-old company.

Shortly after the Tokyo bourse closed for the day, the company revealed that it had lost ¥32.3 billion (US$414 million) in the first half of this year, amid a massive accounting scandal that has badly tarnished the image of the Japanese corporate world.

The loss by the camera and medical instrument maker compares with a net profit of ¥3.81 billion for the same period a year earlier.

Two months to the day after Olympus dumped British chief executive Michael Woodford for his complaints about apparent gaping holes in the balance sheet, the company pledged to mend its ways.

“It has been revealed that our company had announced false financial statements by delaying reporting losses from stocks and other investments,” it said in a statement.

“The third-party committee [established to probe the scandal] pointed to problems with our corporate governance. Our company will ... try to carry out fundamental reforms in order to achieve recovery of trust as quickly as possible,” it said.

Olympus said that it could not issue an outlook for its earnings for this year as a whole because it could not yet determine how the problems would affect sales.

Woodford, who was sacked on Oct. 14, was back in Japan to meet shareholders and lawmakers to discuss Japan’s corporate governance, whose image has been hurt by the firm’s admission that it concealed losses for more than a decade.

The Briton had vowed a showdown after quitting Olympus’ board earlier this month.

Woodford yesterday appeared to strike a more conciliatory tone toward Olympus management, saying he wanted to avoid a so-called proxy war to win shareholder support for sacking its current executives.

“I would have no part, no part in either selling Olympus or breaking up Olympus,” he said at a parliamentary hearing in Tokyo yesterday.

“It has to stay a Japanese company on the [stock exchange],” he said.

“I want to try to avoid a proxy fight. That would be destructive, that would be unhelpful,” the former chief executive added.

Olympus earlier yesterday filed corrected earnings reports for the past five fiscal years, fixing results up until March this year.

For the fiscal year to March alone, Olympus revised downward its net profit from an original ¥7.38 billion to ¥3.87 billion in its latest version.

Shares in the company are worth about half their value before Woodford’s ouster.

The stock closed down 4.08 percent at ¥1,314 yesterday.

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