Olympus to pick partner soon: chief

Kyodo

Scandal-hit Olympus Corp. is looking to select a partner “as soon as possible” to shore up its weakened capital base following the revelation of its coverup of massive investment losses, President Hiroyuki Sasa said in a recent interview.

“We are holding detailed discussions,” Sasa said, noting there has been progress in the talks. But he declined to elaborate on when a decision is likely to be made, or name the firm it is eyeing.

According to sources, the camera and medical equipment maker is arranging to sell an ownership stake to Panasonic Corp.

Sasa said Olympus is working “flexibly” and “broadly,” suggesting it may team up with several companies.

Olympus has admitted to hiding ¥117.7 billion in investment losses dating back to the 1990s. The scandal broke last October when then President and Chief Executive Officer Michael C. Woodford blew the whistle on dubious acquisitions by Olympus and was promptly fired.

As a result, the company’s consolidated capital-to-asset ratio stood at 4.6 percent as of the end of the business year to March 31 after correcting its earnings reports, compared with 11.0 percent at the end of March 2011.

At a news conference earlier this month, Sasa said the current level of its capital adequacy ratio is “extremely dangerous” and he would like to restore its capital level as soon as possible.

Regarding its plan to realign about 40 percent of its 30 plants worldwide, Sasa said Olympus has finished integrating four plants in Nagano Prefecture and would cover its overseas operations in the remaining restructuring process. But he declined to specify areas subject to realignment.

Olympus has decided to pay £10 million, or about ¥1.25 billion, to settle a lawsuit filed by Woodford over his dismissal — an unusually high figure in Japan for a dismissed company chief.

Olympus reached the settlement not because the dismissal was “inappropriate” but because it prioritized “economic rationality,” Sasa said, adding the company chose to concentrate on its business rather than wage a legal battle.

Olympus will hold a general shareholders’ meeting June 28.