Ex-Olympus execs plead guilty to hiding losses

Kyodo

Three former Olympus Corp. executives as well as the company itself pleaded guilty Tuesday to covering up the firm’s massive investment losses.

As their trial opened at the Tokyo District Court, former Chairman Tsuyoshi Kikukawa, 71, former auditor Hideo Yamada, 67, and former Executive Vice President Hisashi Mori, 55, admitted to colluding to submit false financial reports to the Finance Ministry that overstated Olympus’ actual net assets by ¥41.6 billion to ¥117.8 billion. Their admission covered the five-year period through fiscal 2010.

The high-profile scandal came to light after ousted Olympus Chief Executive Officer Michael C. Woodford blew the whistle last October on dubious acquisitions by the company, including the 2008 buyout of British medical company Gyrus Group PLC.

“I am fully responsible for not disclosing the massive losses of the company,” Kikukawa told the court.

“I have caused trouble to our shareholders and employees. I apologize,” he said. “I went through days of anguish ever since I learned about the company’s loss coverup, but I could not make the decision to announce it.”

Hiroyuki Sasa, currently president of the camera and medical equipment maker and who attended Tuesday’s court session as a representative of the firm, also offered an apology.

Four former brokerage firm employees have also been indicted for their alleged involvement in the coverup.

To keep the losses out of sight, the company employed a scheme called “tobashi,” an accounting trick involving moving around impaired securities to defer booking latent losses in earnings reports.