Japanese prosecutors raided the offices of Olympus Corp and the home of a former executive yesterday in a probe into a US$1.7 billion accounting scandal that has threatened the survival of the once-proud camera and medical equipment maker.
Tokyo prosecutors, police and financial regulators have joined forces in a rare joint investigation of the 92-year-old company, which has admitted to hiding huge investment losses via questionable merger and acquisition deals and other accounting tricks stretching back over two decades.
Public broadcaster NHK showed dozens of black-suited investigators marching double-file into an office building that houses three Olympus subsidiaries acquired under one of the loss-making schemes, in what has become one of Japan’s biggest corporate scandals.
Investigations moved into high gear after a panel of experts appointed by Olympus to probe the scandal said early this month that two senior former executives masterminded the scheme with the help of investment bankers. It also found that three former presidents, including Tsuyoshi Kikukawa, who resigned in October over the scandal, had known about the cover-up.
Japanese TV also showed investigators raiding Kikukawa’s residence, as well as Olympus headquarters in a high-rise office district on the western edge of central Tokyo.
Olympus acknowledged the raids in a statement.
“We will continue to cooperate fully with investigative authorities in order to bring the facts to light,” the company said.
“We would again like to apologize deeply for causing great trouble and worry for our shareholders, investors and those we do business with,” Olympus said.
Olympus last week filed five years of corrected accounts, plus overdue first-half results, meeting a Tokyo Stock Exchange deadline to avoid a humiliating delisting, but they revealing a much-depleted balance sheet as the company tries to put the scandal behind it.
The company could still face delisting if the exchange deems that the company’s accounting deceit is sufficiently grave.
Former chief executive Michael Woodford, who blew the whistle on the scandal after being fired in October, is campaigning to get his job back, but he faces long odds in his battle with current management, which is expected to get backing from its bankers for a plan to bring in outside investors to bolster the company’s finances.
“I’m tremendously sad that it’s come to this, especially when it could have been avoided, depending on the actions of upper management,” Olympus employee Masaharu Hamada said outside the company’s headquarters as it was being raided.
Hamada has taken legal action against the company in a case unrelated to the accounting scandal, charging that he was subjected to harassment by management after reporting a compliance breach by his supervisor.
A lower Tokyo court has ruled in his favor and the case is now on appeal.
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
Motorists ride past a mural along a street in Varanasi, India, yesterday.
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
AT HIGH CAPACITY: Three-month order visibility on stable customer demand would push factory utilization to between 80 and 85 percent, Vanguard’s president said Foundry service provider Vanguard International Semiconductor Corp (世界先進) yesterday said it is unable to fully satisfy surging demand for chips used in artificial intelligence (AI) servers and data centers, amid an AI infrastructure investment boom that is crowding out production of less advanced chips. Vanguard is facing an “undersupply of chips” made using mature process technologies, due to strong demand for AI products and improving demand from customers in the commercial, industrial and auto sectors, which are digesting excess inventory to a healthier level, company chairman Fang Leuh (方略) told a virtual investors’ conference. However, Vanguard gave a more conservative view on
RSS