Terumo irks Olympus by declaring merger plan

JIJI

Terumo Corp. rankled Olympus Corp. Thursday by publicizing the business integration proposal it made to the struggling optical equipment maker, sources said.

Terumo, a major medical equipment maker, abruptly announced the proposal even though the two sides remain in negotiations.

“I can’t understand what they were thinking,” an Olympus executive said in anger.

The announcement may backfire and help Sony Corp., which is believed to have gained the upper hand in its bid to woo Olympus, industry sources said.

Terumo is proposing investing ¥50 billion in the scandal-hit company and forming a panel to discuss setting up a joint holding company.

The holding company system would allow Olympus to stay independent to some extent after integration.

But the sources said Terumo made the integration proposal before the camera maker’s accounting scandal broke last year. Although their negotiations were temporarily halted by the confusion caused by the scandal, more than six months have passed without major signs of progress.

“We cannot participate in negotiations that take business integration for granted,” an Olympus executive said.

If Olympus teams up with Sony, it can expect to reduce costs in its loss-making digital camera division by procuring parts and developing products in tandem with the electronics giant. An alliance with Terumo does not have the same clear benefits, sources said.

Terumo apparently made the unusual announcement in an effort to turn the tables on Olympus.

Instead, the action appears to have irritated the company. Terumo is running the risk of damaging ties with Olympus established through their cooperation in the medical equipment business, the sources said.

Sharp hit for taxes

OSAKA
Kyodo

Sharp Corp. has been accused by tax authorities of concealing around ¥1.5 billion in taxable income over a five-year period through March 2011 in a deal with an overseas subsidiary, sources said Friday.

The firm’s undeclared income through the concealment and accounting errors totaled around ¥7.4 billion, but it was partially offset by losses the major electronics maker logged in the business year that ended in March 2009.

The Osaka-based company is thus required to pay around ¥52 million in additional tax, which it said it will pay in response to a tax inquiry by the Osaka Regional Taxation Bureau.

According to the sources, the firm exported products to an overseas subsidiary at a lower price than usual, leading tax authorities to determine that the company “intentionally kept down its sales and shifted income to its subsidiary.”

The tax authority also said Sharp made accounting errors, such as carrying over the reporting of sales to the following accounting term, the sources said.