Olympus Corp. won approval Friday to appoint new management, including Yasukuki Kimoto as chief executive officer and Hiroyuki Sasa as president, despite opposition from foreign shareholders.
The result effectively means banks and insurance companies that hold shares in the camera and endoscope maker could overpower the non-Japanese shareholders, including Michael C. Woodford, the ousted president and CEO who attended Friday’s meeting in Tokyo, as well as some individual Japanese investors who are not convinced the new directors will regain the public’s trust.
“The damage to this country is done. SMBC and other large shareholders are damaging this nation in the eyes of the world,” Woodford said after the meeting. “The only way to stop it is for the Japanese people to rise up and say, ‘I’m sick of this.’ “
A record 947 shareholders who are not board members attended the meeting. The previous record was a mere 280, set last June.
At the outset of the meeting, President Shuichi Takayama apologized for the massive loss-coverup scandal, saying “we will work on drastic reform to regain trust as soon as possible.”
For three hours, angry shareholders hurled harsh accusations at management about the bubble-era coverup in a heated question-and-answer session.
Olympus hid more than ¥100 billion in losses on securities investments for almost two decades and used dubious transactions to cancel them out. Twenty people, including Woodford, the man who brought the crime to light and got fired for the disclosure, slammed the board for its “tobashi” loss-hiding hijinks.
“How dare you. Shame on you,” Woodford shouted, calling on all of the current board members to resign.
Woodford sharply criticized the appointment of Kimoto, a former executive of Sumitomo Mitsui Banking Corp., as chairman because SMBC is Olympus’ main bank and one of its largest shareholders. Woodford charges that Kimoto is therefore incapable of changing the company’s crony culture, which a third-party committee condemned as “rotten to the core.”
The 11 board members, three of whom were previously rank -and-file Olympus employees, and four auditors who were approved Friday are all new, conforming with the third-party panel’s recommendation in December that the entire board resign.
Still, Woodford complained that two of the old board members would become corporate officers.
Some other individual shareholders proposed that Woodford be reinstated to the board, but the motion was voted down.
“Mr. Woodford is a whistle-blower. If a whistle-blower was fired, the system of collecting sensitive information from whistle-blowers does not work. Youshould create a good example for the future by protecting a whistle-bower,” said an individual shareholder who gave his last name as Yamaguchi.
In response, previous board member Masataka Suzuki said Olympus will set up a department at a law firm this month for accepting confidential information.
Another shareholder, Yutaka Yamanaka, also opposed the appointment of Kimoto as chairman and the appointment of auditor Masashi Shimizu, a manager of Nippon Life Insurance Co., because SMBC and Nippon Life are both large shareholders and financial institutions.
Nippon Life held 8.4 percent of Olympus as of March 2011, making it the largest shareholder. Bank of Tokyo-Mitsubishi UFJ, the second-largest, had 4.98 percent and SMBC had 3.13 percent.