Olympus Corp. said Friday that it has reached the first settlement in a series of shareholder lawsuits filed in Japan and abroad over a bubble-era accounting fraud that gutted the company’s value after it came to light.
The camera and precision instruments maker agreed to pay $2.6 million to settle a suit filed by shareholders in the United States.
The suit was filed with the U.S. District Court for the Eastern District of Pennsylvania in November 2011, claiming losses from a decline in the value of Olympus’ American depository receipts caused by the accounting scandal and coverup attempt.
The scandal-tainted company has been accused of concealing huge losses on speculative investments made in the 1990s by using funds from corporate acquisitions since 2005.
After the cover-up finally came to light in 2011 because of questions about past acquisitions asked by its first foreign president, Britain Michael C. Woodford, the company’s share price briefly dropped below ¥500 from levels above ¥2,000 while its equity capital ratio, a barometer of financial health, fell sharply. Woodford was sacked shortly after becoming president because he wouldn’t let his suspicions about the acquisitions go.
Olympus faces 22 pending damage suits in Japan and abroad, with claims totaling more than ¥50 billion.
In July, the company raised some ¥120 billion through a public offering of new shares and other methods to prepare for potential damages, a senior company official said.
In addition, Olympus expects the robust performance of its mainstay medical equipment business to continue.
“Even if the company faces further damage payments, it will be able to meet them from its annual profits,” said Yusuke Takayama, analyst at SMBC Nikko Securities Inc.