Published January 20, 2012
TOKYO – Japan's Olympus Corp , struggling to emerge from a $1.7 billion accounting scandal, will be allowed to stay listed on the Tokyo Stock Exchange but will be placed on a "security on alert" list for firms seen needing to urgently improve their internal management, the bourse said on Friday.
Olympus will have to submit improvement reports for three years but moves off the bourse's supervisory watchlist, meaning it is in less immediate danger of being delisted, a step that would make it harder to raise capital.
The bourse also imposed a fine of 10 million yen ($129,800) on the maker of medical equipment and cameras, which covered up losses using dubious deals and payments.
The falsehoods affected Olympus's earnings reports over a long period, the bourse said on its website. "But taking into consideration the scale of the firm, we cannot say this continuously caused serious misinterpretations of its profit standards or operation trends."
Later the company that regulates listing issues for the bourse warned that the decision could be reviewed depending on the findings of investigations by authorities.
It is under investigation by Japanese police, prosecutors and regulators as well as law-enforcement agencies in the United States and Britain.
Olympus said it will work to regain trust.
"We sincerely accept the Tokyo Stock Exchange's decision and will move forward with drastic reforms to regain trust as soon as possible," said Tsuyoshi Kitada, a spokesman at the firm.
The company has lost about 50 percent of its market value since the scandal first erupted in October, when it fired British CEO Michael Woodford for questioning acquisition deals that an investigative panel later found had been used to cover losses.
The scandal has severely depleted Olympus's net assets, but it is being supported by major Japanese shareholders who prefer bringing in an equity partner to selling the whole company or its assets.
The firm is set to bring on a new president and overhaul its management in an extraordinary shareholders' meeting set to take place in the latter half of April.
($1 = 77.0700 Japanese yen) (Reporting by Nobuhiro Kubo and Yoko Kubota; Editing by Michael Watson)