Near the end of the year, Japan’s optical equipment giant Olympus has exposed shocking financial scandals. In the past decade or so, the company has concealed a huge amount of investment losses of US$4.9 billion and concealed it with acquisition-related projects. This triggered a crisis of confidence. At present, an independent expert group commissioned by Olympus is investigating this property scandal. According to regulations, the company shall submit revised financial statements as of the end of September, the city of late is facing a month back Dangerous <br> <br> huge consulting fees detonated financial scandal in the Tokyo Stock Exchange before December 14
Olympus's name comes from Mount Olympus in Greek mythology. The original idea is where the gods live. After Olympus admitted last month that it had concealed the huge loss of investment through fictitious corporate acquisition funds, the image of this well-known enterprise that had been in business for more than 90 years fell to the ground and the “sacred place†was experiencing an unprecedented crisis of confidence.
Since the 1990s, Olympus has actively conducted capital operations, but with the collapse of the bubble economy, the company suffered huge book losses. In 2000, Olympus began to adopt accounting rules based on market value. The book loss must be listed in the financial statements. At that time, the company’s losses had reached nearly 100 billion yen. In order to conceal losses in the annual report, Olympus began to repeatedly transfer high investment losses to investment funds with different settlement time for financial fraud.
In 2008, Olympus acquired Gyrus Group, a British medical device company, for 220 billion yen (US$ 2.86 billion). In order to fill in the gap, they also “paid†another 16 billion yen (about 860 million U.S. dollars) for an acquisition consulting firm. According to the investigation, the consulting company was registered on an island in the Caribbean, and the person in charge was the original Japan. Securities company staff, the company was canceled after the acquisition.
In addition, from 2006 to 2008, Olympus also acquired three Japanese small companies that had little to do with its core business at a high price of 73.49 billion yen. The profits of the three companies are still less than 1 billion yen. One year later, on the account, the value of the three companies was reduced by two-thirds. These so-called high consulting fees and acquisition fees are all considered as cover to fill the previous book deficit.
After the scandal was exposed, the United Kingdom's SFO (United Kingdom Major Fraud Investigation Bureau) and the United States FBI teamed up with the Japanese regulatory authorities to investigate the case. According to the “New York Timesâ€, Japanese officials are currently investigating Olympus’s account deficit and possible involvement in organized crime.
It is estimated that when the Japanese bubble burst, Olympus’s investment securities lost hundreds of billions of yen, and these losses have never been reflected in financial reports. If it was not revealed by former president Olympus, false accounts would not be exposed. The third-party accounting auditing bodies in these years were in name only. Some media questioned whether Olympus was a single case or whether such problems existed in Japan's current corporate system.
Former chairman insists that "acquisition is reasonable"
In April of this year, Kikukawa, the then-president of the company, recommended Michael O. Woodford, president of Olympus Europe, as the president, and turned himself into the chairmanship on the grounds of "a wise, decisive and internationally minded person." After Woodford took over as president, he discovered that the company’s previous acquisitions had undisclosed funds and he believed that party Ju Chuan had just resigned.
Kikugawa first said that there was nothing wrong with the acquisition and refused to resign. Then he held a board of directors in mid-October. Apart from Woodford himself who did not participate in the vote, other directors unanimously agreed to relieve Woodford’s position as President. Just part time. At that time, the company stated that the reason for the dismissal was that "Woodford was arbitrarily decisive and had a big disagreement with other senior executives in the direction of operations."
At this point, Olympus’s suspicions of concealing huge losses have been exposed. After leaving office, Woodford continued to question the media, Olympus’s share price fell to half.
On October 26, Kikukawa had his company’s image damaged and his share price plummeted to resign as a non-represented director. Senior Director Takashi Shiichi is appointed as the new president. Olympus hopes to conclude the issue as soon as possible by identifying the situation through a third party committee of lawyers and certified public accountants.
When Kikugawa resigned, he emphasized that the previous acquisition was properly evaluated and the procedures were legal and there was no wrongdoing. In an explanation of the reasons for his resignation, he said that the reputation of the company is now impaired and that new management should promote the restoration of credibility.
Takayama later held a press conference in Tokyo and explained the widely questioned corporate mergers and acquisitions. He still insisted that he had not violated the law. Takayama said that the past mergers and acquisitions cases were all based on the company’s mid- and long-term strategic research. The company hopes to seek development with its medical business as its core. There is no illegality.
Takayama explained that in addition to general investment advice, consultancy fees also include financial and legal advice. One of the reasons for the large amount of payment is that it also includes the cost of buying (Gyrus issued to the consulting company) preferred stock. It does not exceed the upper limit of the medical field and does not believe that the payment is excessively high. However, when asked about the detailed transaction process and related basis, he only stated that these issues will be investigated by the Third Party Committee. The third party committee will be set up as soon as possible. The primary task is to restore the company's creditworthiness. Subsequently, an independent committee of six lawyers and certified public accountants was established and began investigating the whereabouts of the acquisition.
U.S., U.K., and UK Justice
Since the acquisition involved a consulting company in the United States, Woodford submitted to the U.S. Department of Justice and the FBI survey data developed by a third party, which described his conversation with Kikugawa.
Woodford said that the FBI had requested a few hours of investigation in New York. In addition, Woodford also met with SFO officials and submitted investigation data to the relevant securities trading supervisory committee in Japan. According to reports, the judicial departments of the three countries, Japan, the United States, and the United States, have already begun joint investigations.
On November 8th, with the involvement of the Anglo-American investigative agencies, Olympus finally acknowledged the use of corporate acquisitions to conceal investment losses, and decided to cancel the duties of the deputy headman Sen Jiuji on the ground that it was related to the issue. Permanent Supervisor Hideki Yamada also indicated that he will resign.
On the same day, Olympus shares opened lower to 734 yen per share, a sharp drop of 300 yen from the previous trading day, a drop of 29.01%, and the lowest since 1995.
At the press conference held at noon on the first day of Takayama revision, he apologized that the contents of the press conference were not in conformity with the facts. The concealment of investment losses during the year led to a series of subsequent problems. I am very sorry about this. Takayama’s acquisition of the case was secretly conducted by Kikugawa, Morihisa and Yamada Hideo, and he himself was a member of the board of directors who was unaware of the situation and did not rule out the possibility of filing lawsuits against these three individuals.
The amount of the concealed loss was not disclosed at the press conference. It is estimated that the loss exceeds 100 billion yen (approximately RMB 8.2 billion). Olympus plans to revise its past financial statements based on the findings of the investigation after the investigation by the Independent Commission. At present, the release date of the 2011 fiscal year interim report is also pushed forward.
After the press conference, the Japan Metropolitan Police Department also expressed concern about the case and has started to collect information on the grounds of alleged violations of the "Finance Commodity Exchange Act," including contact with company department heads for submission of accounting information. Wait. According to sources, the Metropolitan Police Department will also cooperate with the securities regulatory agencies that have already conducted investigations and the Tokyo seizure inspection in order to find out all cases of concealing huge losses.
The former president revived his voice
Woodford said frankly that he was "surprised" by the Olympus scandal and said that he could not believe that other directors were unaware that he should remove all members of the board of directors. After Olympus concealed the loss scandal, Woodford was seen as a hero to expose the Olympus darkbox acquisition. Therefore, the call for resuming its presidential position is also rising in Japanese society. However, the company’s current management has consistently refused to cancel the personnel decision to dismiss Woodford, and the division between the company’s management and investors on this issue will intensify.
After Woodford pointed out that the Olympus acquisition problem, Olympus stock price fell to 10 consecutive trading days on November 11. The day before, the Tokyo Stock Exchange announced the inclusion of Olympus stocks on the supervision list, reminding investors that the stock had the risk of delisting.
In a chaotic situation, the British investment fund "Baillie Gifford," which has more than 4% of Olympus shares issued as of the end of October, issued a statement on November 9th, supporting the thorough cleaning of Olympus by Woodford. .
Olympus Former Managing Director Miyata Kenji has also set up a homepage requiring Woodford’s reinstatement recently, pointing out that Olympus is on the verge of sinking. The current management has completely lost his faith in investors and only allowed Woodford to return to this path. Can go.
Woodford expressed his willingness to reinstate, saying that if shareholders are willing, they would like to lead Olympus to regroup. He emphasized that Olympus's problem is not the products and employees. If they can return to Olympus, they will reduce the human governance factors and achieve the highest level of corporate management.
Initiate thinking about the management style of "Japanese Enterprises"
In fact, shortly before the Olympus scandal was exposed, the Japanese society also revealed that the former chairman of the famous Japanese company, Dawang Paper, used his position to borrow money from the subsidiary to scan the gambling scandal. In view of the successive exposures of the listed company scandals, the ruling party’s Democratic Finance and Finance Department meeting on November 10 decided to set up a “Capital Market and Corporate Governance Working Group†headed by Sen. Okubo, who will be responsible for discussing corporate governance strengthening measures. This move aims to strengthen the supervision of business operations and requires companies to improve the information disclosure system so as to prevent similar scandals.
Since the corporate governance and information disclosure of Japanese companies are criticized by overseas investors and the media, the working group will mainly examine past scandal cases and list the problems faced. The working group plans to convene its first meeting in the near future to discuss improvement measures. It does not rule out the revision of the "Company Law", "Financial Commodity Exchange Act" and the listing rules of the Tokyo Stock Exchange.
The Secretary-General of the Working Group and the Representative of the House of Representatives Netizen Shinsuke pointed out that in the Olympus issue, Japan must have a sense of crisis and need to realize that it will seriously undermine the integrity of the capital market. He said that in order to enhance the vitality of the market, it is necessary not only to revise laws and regulations, but also to discuss the voluntary regulation of the Tokyo Stock Exchange and the role of the CPA.
Regarding the concealment of Olympus, Prime Minister Noda Yoshihiko also emphasized at the press conference on November 11 that it must be dealt with seriously. He believed that a strict and transparent accounting system was extremely important and hoped to ensure the reliability of the Japanese financial market.
At the regular press conference on November 15th, the representative of the Japan Economics Association’s Assistant Director General Tanigawa Tanaka stated that Olympus concealed the huge loss scandal and stated that it must not be easy to handle the management methods and management that try to deceive shareholders and should be severe. punish. When talking about the impact on the Japanese stock market, he pointed out that this incident has caused people to think about the "mode of Japanese companies operating", overseas investment in Japanese stocks has always been smaller, affected by this is still not optimistic.
Olympus's name comes from Mount Olympus in Greek mythology. The original idea is where the gods live. After Olympus admitted last month that it had concealed the huge loss of investment through fictitious corporate acquisition funds, the image of this well-known enterprise that had been in business for more than 90 years fell to the ground and the “sacred place†was experiencing an unprecedented crisis of confidence.
Since the 1990s, Olympus has actively conducted capital operations, but with the collapse of the bubble economy, the company suffered huge book losses. In 2000, Olympus began to adopt accounting rules based on market value. The book loss must be listed in the financial statements. At that time, the company’s losses had reached nearly 100 billion yen. In order to conceal losses in the annual report, Olympus began to repeatedly transfer high investment losses to investment funds with different settlement time for financial fraud.
In 2008, Olympus acquired Gyrus Group, a British medical device company, for 220 billion yen (US$ 2.86 billion). In order to fill in the gap, they also “paid†another 16 billion yen (about 860 million U.S. dollars) for an acquisition consulting firm. According to the investigation, the consulting company was registered on an island in the Caribbean, and the person in charge was the original Japan. Securities company staff, the company was canceled after the acquisition.
In addition, from 2006 to 2008, Olympus also acquired three Japanese small companies that had little to do with its core business at a high price of 73.49 billion yen. The profits of the three companies are still less than 1 billion yen. One year later, on the account, the value of the three companies was reduced by two-thirds. These so-called high consulting fees and acquisition fees are all considered as cover to fill the previous book deficit.
After the scandal was exposed, the United Kingdom's SFO (United Kingdom Major Fraud Investigation Bureau) and the United States FBI teamed up with the Japanese regulatory authorities to investigate the case. According to the “New York Timesâ€, Japanese officials are currently investigating Olympus’s account deficit and possible involvement in organized crime.
It is estimated that when the Japanese bubble burst, Olympus’s investment securities lost hundreds of billions of yen, and these losses have never been reflected in financial reports. If it was not revealed by former president Olympus, false accounts would not be exposed. The third-party accounting auditing bodies in these years were in name only. Some media questioned whether Olympus was a single case or whether such problems existed in Japan's current corporate system.
Former chairman insists that "acquisition is reasonable"
In April of this year, Kikukawa, the then-president of the company, recommended Michael O. Woodford, president of Olympus Europe, as the president, and turned himself into the chairmanship on the grounds of "a wise, decisive and internationally minded person." After Woodford took over as president, he discovered that the company’s previous acquisitions had undisclosed funds and he believed that party Ju Chuan had just resigned.
Kikugawa first said that there was nothing wrong with the acquisition and refused to resign. Then he held a board of directors in mid-October. Apart from Woodford himself who did not participate in the vote, other directors unanimously agreed to relieve Woodford’s position as President. Just part time. At that time, the company stated that the reason for the dismissal was that "Woodford was arbitrarily decisive and had a big disagreement with other senior executives in the direction of operations."
At this point, Olympus’s suspicions of concealing huge losses have been exposed. After leaving office, Woodford continued to question the media, Olympus’s share price fell to half.
On October 26, Kikukawa had his company’s image damaged and his share price plummeted to resign as a non-represented director. Senior Director Takashi Shiichi is appointed as the new president. Olympus hopes to conclude the issue as soon as possible by identifying the situation through a third party committee of lawyers and certified public accountants.
When Kikugawa resigned, he emphasized that the previous acquisition was properly evaluated and the procedures were legal and there was no wrongdoing. In an explanation of the reasons for his resignation, he said that the reputation of the company is now impaired and that new management should promote the restoration of credibility.
Takayama later held a press conference in Tokyo and explained the widely questioned corporate mergers and acquisitions. He still insisted that he had not violated the law. Takayama said that the past mergers and acquisitions cases were all based on the company’s mid- and long-term strategic research. The company hopes to seek development with its medical business as its core. There is no illegality.
Takayama explained that in addition to general investment advice, consultancy fees also include financial and legal advice. One of the reasons for the large amount of payment is that it also includes the cost of buying (Gyrus issued to the consulting company) preferred stock. It does not exceed the upper limit of the medical field and does not believe that the payment is excessively high. However, when asked about the detailed transaction process and related basis, he only stated that these issues will be investigated by the Third Party Committee. The third party committee will be set up as soon as possible. The primary task is to restore the company's creditworthiness. Subsequently, an independent committee of six lawyers and certified public accountants was established and began investigating the whereabouts of the acquisition.
U.S., U.K., and UK Justice
Since the acquisition involved a consulting company in the United States, Woodford submitted to the U.S. Department of Justice and the FBI survey data developed by a third party, which described his conversation with Kikugawa.
Woodford said that the FBI had requested a few hours of investigation in New York. In addition, Woodford also met with SFO officials and submitted investigation data to the relevant securities trading supervisory committee in Japan. According to reports, the judicial departments of the three countries, Japan, the United States, and the United States, have already begun joint investigations.
On November 8th, with the involvement of the Anglo-American investigative agencies, Olympus finally acknowledged the use of corporate acquisitions to conceal investment losses, and decided to cancel the duties of the deputy headman Sen Jiuji on the ground that it was related to the issue. Permanent Supervisor Hideki Yamada also indicated that he will resign.
On the same day, Olympus shares opened lower to 734 yen per share, a sharp drop of 300 yen from the previous trading day, a drop of 29.01%, and the lowest since 1995.
At the press conference held at noon on the first day of Takayama revision, he apologized that the contents of the press conference were not in conformity with the facts. The concealment of investment losses during the year led to a series of subsequent problems. I am very sorry about this. Takayama’s acquisition of the case was secretly conducted by Kikugawa, Morihisa and Yamada Hideo, and he himself was a member of the board of directors who was unaware of the situation and did not rule out the possibility of filing lawsuits against these three individuals.
The amount of the concealed loss was not disclosed at the press conference. It is estimated that the loss exceeds 100 billion yen (approximately RMB 8.2 billion). Olympus plans to revise its past financial statements based on the findings of the investigation after the investigation by the Independent Commission. At present, the release date of the 2011 fiscal year interim report is also pushed forward.
After the press conference, the Japan Metropolitan Police Department also expressed concern about the case and has started to collect information on the grounds of alleged violations of the "Finance Commodity Exchange Act," including contact with company department heads for submission of accounting information. Wait. According to sources, the Metropolitan Police Department will also cooperate with the securities regulatory agencies that have already conducted investigations and the Tokyo seizure inspection in order to find out all cases of concealing huge losses.
The former president revived his voice
Woodford said frankly that he was "surprised" by the Olympus scandal and said that he could not believe that other directors were unaware that he should remove all members of the board of directors. After Olympus concealed the loss scandal, Woodford was seen as a hero to expose the Olympus darkbox acquisition. Therefore, the call for resuming its presidential position is also rising in Japanese society. However, the company’s current management has consistently refused to cancel the personnel decision to dismiss Woodford, and the division between the company’s management and investors on this issue will intensify.
After Woodford pointed out that the Olympus acquisition problem, Olympus stock price fell to 10 consecutive trading days on November 11. The day before, the Tokyo Stock Exchange announced the inclusion of Olympus stocks on the supervision list, reminding investors that the stock had the risk of delisting.
In a chaotic situation, the British investment fund "Baillie Gifford," which has more than 4% of Olympus shares issued as of the end of October, issued a statement on November 9th, supporting the thorough cleaning of Olympus by Woodford. .
Olympus Former Managing Director Miyata Kenji has also set up a homepage requiring Woodford’s reinstatement recently, pointing out that Olympus is on the verge of sinking. The current management has completely lost his faith in investors and only allowed Woodford to return to this path. Can go.
Woodford expressed his willingness to reinstate, saying that if shareholders are willing, they would like to lead Olympus to regroup. He emphasized that Olympus's problem is not the products and employees. If they can return to Olympus, they will reduce the human governance factors and achieve the highest level of corporate management.
Initiate thinking about the management style of "Japanese Enterprises"
In fact, shortly before the Olympus scandal was exposed, the Japanese society also revealed that the former chairman of the famous Japanese company, Dawang Paper, used his position to borrow money from the subsidiary to scan the gambling scandal. In view of the successive exposures of the listed company scandals, the ruling party’s Democratic Finance and Finance Department meeting on November 10 decided to set up a “Capital Market and Corporate Governance Working Group†headed by Sen. Okubo, who will be responsible for discussing corporate governance strengthening measures. This move aims to strengthen the supervision of business operations and requires companies to improve the information disclosure system so as to prevent similar scandals.
Since the corporate governance and information disclosure of Japanese companies are criticized by overseas investors and the media, the working group will mainly examine past scandal cases and list the problems faced. The working group plans to convene its first meeting in the near future to discuss improvement measures. It does not rule out the revision of the "Company Law", "Financial Commodity Exchange Act" and the listing rules of the Tokyo Stock Exchange.
The Secretary-General of the Working Group and the Representative of the House of Representatives Netizen Shinsuke pointed out that in the Olympus issue, Japan must have a sense of crisis and need to realize that it will seriously undermine the integrity of the capital market. He said that in order to enhance the vitality of the market, it is necessary not only to revise laws and regulations, but also to discuss the voluntary regulation of the Tokyo Stock Exchange and the role of the CPA.
Regarding the concealment of Olympus, Prime Minister Noda Yoshihiko also emphasized at the press conference on November 11 that it must be dealt with seriously. He believed that a strict and transparent accounting system was extremely important and hoped to ensure the reliability of the Japanese financial market.
At the regular press conference on November 15th, the representative of the Japan Economics Association’s Assistant Director General Tanigawa Tanaka stated that Olympus concealed the huge loss scandal and stated that it must not be easy to handle the management methods and management that try to deceive shareholders and should be severe. punish. When talking about the impact on the Japanese stock market, he pointed out that this incident has caused people to think about the "mode of Japanese companies operating", overseas investment in Japanese stocks has always been smaller, affected by this is still not optimistic.
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