Olympus Chiefs in trouble with the law

Seven men including the former President Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former auditor Hideo Yamada of Olympus Corp and their former bankers Akio Nakagawa and Nobumasa Yokoo and two others have been arrested in Japan in connection with a 1.7 billion dollar fraud that was perpetrated in the late 80’s to hide some risky investments made during Japan’s bubble economy.

In October the then chief executive Michael Woodford, a Briton and one of the rare foreign heads of a Japanese firm, questioned some dubious deals, this resulted in his being sacked by the Olympus board. It has since been found that these deals had been used to conceal the losses through complex takeover deals at the endoscope and camera maker. Mr. Woodford told reporters at a news conference that very large sums of money were involved and there is still a long way to go before a complete understanding of the magnitude of the fraud is uncovered, including the extent of the banks involvement.

 

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