Olympus Corp. said Wednesday it’s being sued by six banks for a total of ¥27.9 billion in damages, the largest amount among civil lawsuits filed against the camera and endoscope maker over a 13-year accounting fraud.
The banks are seeking compensation for damages resulting from false financial statements filed by Olympus between fiscal 2000 and the first quarter of fiscal 2011, the Tokyo-based company said in a statement. Olympus said it received a notice from the plaintiffs’ attorneys that the lawsuit was filed Monday, but hasn’t yet been served with the suit.
The company in November lowered its profit forecast for fiscal 2013, citing cash set aside for lawsuits. The company cut its net assets by $1.3 billion in 2011 after admitting it tried to conceal past losses by inflating fees to advisers and overpaying for takeovers.
“This is just a reminder to the market of the contingent risk associated with the past of Olympus,” said Claudio Aritomi, a Tokyo-based analyst at Macquarie Group Ltd. “There was always the risk there could be more coming.”
The banks suing the company are Mitsubishi UFJ Trust & Banking Corp., Master Trust Bank of Japan Ltd., Japan Trustee Services Bank Ltd., Trust & Custody Services Bank Ltd., Nomura Trust & Banking Co., and State Street Trust & Banking Co., according to the statement.
Mitsubishi UFJ Trust and Master Trust Bank of Japan are seeking a total of ¥12.4 billion in compensation for losses incurred when they sold Olympus shares, which plunged after reports the camera maker’s financial reports were misleading, said Takeshi Yuki, a Tokyo-based spokesman for Mitsubishi UFJ Trust.
“The firms manage money on behalf of their clients,” Yuki said. “Recovering the loss is our top priority.”
The total amount sought in the case, filed in the Tokyo District Court, is the largest among the civil lawsuits against Olympus, company spokesman Tsuyoshi Oshima said.
The world’s biggest maker of endoscopes said in November 2012 it was sued by 48 investors, including State Street Bank and Trust Co. and Government of Singapore Investment Corporation Pte Ltd., for ¥19.1 billion. The lawsuit followed 14 similar cases in Japan in which investors were suing over the accounting fraud, Olympus said at the time.
Former Chairman Tsuyoshi Kikukawa and two other former executives pleaded guilty in September 2012 for covering up losses at Olympus for 13 years starting in the 1990s. The $1.7 billion fraud was revealed by the company’s former president, Michael C. Woodford, in 2011.