Ex-Olympus CEO Woodford sues company for breach of contract, four years after alleging fraud

Bloomberg

Michael Woodford, the whistle-blowing former chief executive officer of Olympus Corp., has sued his former employer in the U.K. for breach of contract, more than four years after he alleged a $1.7 billion accounting fraud and 13-year cover-up at the firm.

Woodford, who settled a 2012 employment suit with the firm for an undisclosed sum, filed the claim Thursday, according to court records. Woodford confirmed the lawsuit when contacted by telephone but declined to comment further.

The U.K. Serious Fraud Office dropped its case against Olympus in November, citing “insufficient evidence” for a realistic chance of conviction, two years after charging the company with making false and misleading financial statements. The decision came after an appeals court ruled a company couldn’t be prosecuted for misleading auditors under the legislation the SFO was relying on.

Reports of the attempts to hide losses in mid-October 2011 triggered an 82 percent drop in the company’s shares over the next month. Olympus was fined ¥700 million ($6 million) in Japan, and three executives pleaded guilty in 2013 to covering up losses at the maker of endoscopes and cameras.

Olympus didn’t respond to an e-mail or phone call requesting comment.