LONDON – Panasonic Corp. is in talks with Olympus Corp. over a capital and business tieup, sources claimed Wednesday.
Panasonic is looking to strengthen its medical equipment business through the alliance, and could become the largest shareholder in the scandal-hit camera and medical equipment maker, they said.
Sony Corp., Fujifilm Holdings Corp. and Terumo Corp. are also considered candidates for alliances with Olympus, which plans to narrow the field by the end of June, the sources said.
Olympus’ capital adequacy ratio fell to an anemic 4.6 percent as of the end of March, after its reputation and price share were shredded by a loss coverup scandal that broke last October.
A plan the Tokyo-based company is scheduled to announce in June is expected to cite the benefits of a capital alliance on its financial health amid the contraction of its loss-making compact digital camera business.
Late last year, Olympus admitted it concealed ¥117.7 billion in investment losses via an elaborate accounting scam dating back to the 1990s. Several former Olympus executives have been arrested and indicted on suspicion of falsifying financial statements, including ex-Chairman Tsuyoshi Kikukawa.
Panasonic is meanwhile looking to eliminate about 1,000 jobs at its telecommunications equipment and systems businesses by year’s end and transferring the workers to other divisions as part of a cost-cutting plan to shift all cellphone handset output abroad as early as summer.
Employees of group firms, including Panasonic Mobile Communications Co. and Panasonic System Networks Co., would be among those subject to the transfers. Output of cellphones at Panasonic Mobile Communications’ plant in Kakegawa, Shizuoka Prefecture, would be moved abroad to countries including China and Malaysia.
Woodford settles suit
Ousted Olympus Corp. CEO and President Michael C. Woodford said he has reached a ￡10 million (¥1.25 billion) settlement with the company to resolve a suit he filed in Britain over alleged unfair dismissal.
“Both sides signed the agreement (Tuesday) but it still has to be ratified by the board of Olympus” on June 8, Woodford said in London, declining comment on the specific terms. “I’m looking forward to going back to a normal life with my family.”
The struggling manufacturer of medical equipment and digital cameras is finalizing the terms of the settlement, sources in Tokyo separately said Tuesday.
Although Woodford reportedly had been seeking as much as $60 million from Olympus, the settlement figure is still unusually high for a Japanese company to pay a dismissed chief.
Woodford, who assumed the Olympus presidency in April 2011, was axed in October after asking that executives, including then-Chairman Tsuyoshi Kikukawa, submit documents on past acquisitions used to disguise massive investment losses. The firm later admitted using shady accounting since the 1990s to hide ¥117.7 billion in losses.