Olympus suing execs for billions

Damages for coverup sought; Woodford also files case in U.K.

Kyodo, Bloomberg

Olympus Corp. has filed a lawsuit against former President and Chairman Tsuyoshi Kikukawa and other former top executives, seeking billions of yen in damages, sources said Monday.

The damages suit over their roles in a $1.7 billion coverup of losses was filed with the Tokyo District Court, the sources said.

An in-house investigation panel has recommended Olympus seek more than ¥90 billion from more than 10 current and past executives, including incumbent President Shuichi Takayama, for hiding the losses over a span of more than a decade, the sources said.

Former President Michael C. Woodford, who was fired after he challenged the board on its dubious takeover and accounting practices, is also suing the company, for wrongful dismissal.

“It’s all part of the natural fallout to be expected with each party trying to stake their positions and to protect their legal interests,” said Eugene Tan, assistant professor of law at the Singapore Management University.

“We’ll see suits and countersuits taking place in the next couple of weeks, if not months.”

Olympus will announce its response to the panel’s report Tuesday, it said in a statement Sunday to the Tokyo Stock Exchange.

The company inflated fees to advisers on the $2.1 billion acquisition of Gyrus Group PLC in 2008 and overpaid in purchasing three Japanese companies with the intention of increasing “goodwill,” a separate independent panel investigating the fraud said last month. The panel said it found a culture of “yes men” and a board that failed in its duty to stop a “rotten” core of executives from duping auditors, regulators and investors.

Woodford filed suit last week in the U.K., seeking damages for the remainder of his four-year contract and additional costs.

Before being named as Olympus’ first non-Japanese president and CEO last year, the British national ran the company’s European operations, where he won praise from analysts for cutting costs and improving profitability.