Published October 20, 2011
By Kirstin RidleyOusted Olympus Corp <7733.T> chief executive Michael Woodford is consulting police over whether he needs protection after passing "new information" to British fraud investigators about the Japanese company's irregular payments to advisory firms.
Woodford, who says he fears for his safety after discovering unexplained and hefty payments linked to at least four acquisitions around 2008, told Reuters on Thursday the Serious Fraud Office (SFO) had suggested he go to the police.
"I returned to the SFO yesterday because certain new information has come to light which I am not at liberty to discuss, but which I felt investigating authorities should be aware of," he told Reuters Insider television.
To view Reuters Insider interview: http://reut.rs/nWckPL
"They made clear they are not the police...and if I had concerns about my safety, I should go to the police. And I will be going to Scotland Yard."
Olympus veteran Woodford, who abruptly left Japan last week after contacts there advised him to "take care" of his safety, said he was fired just two weeks into his promotion because he presented the board with a PriceWaterhouseCoopers investigative report he had commissioned into the mystery payments.
Olympus said last Friday it had dismissed Woodford because of management issues. The company confirmed for the first time on Wednesday the size of the fee paid to the advisers as part of the Gyrus takeover. But it declined to identify the advisers and said it no longer knew of their whereabouts. [ID:nL3E7LJ224]
The PWC report focuses on fees of $687 million paid to apparently U.S. and Cayman-island incorporated advisers linked to Olympus's $2.0 billion acquisition of British medical equipment maker Gyrus in 2008.
But it also mentions three smaller acquisitions completed the same year worth 73.4 billion yen ($955 million) -- of start-ups Altis, a medical waste recycling company, on-line cosmetics firm Humalabo and microwaveable cookware maker News Chef -- which led to a prompt impairment charge of $600 million in Olympus's audited accounts.
"Whether there are forces behind it, because these transactions are so extraordinary, is a fundamental concern of mine because you are looking at amounts approaching $1.5 billion which are pretty inexplicable," Woodford said.
The scandal, which has again thrown a spotlight onto corporate governance in Japan, has sent Olympus's shares into free-fall. Banks have suspended stock ratings and a Japanese ratings agency has threatened to downgrade its credit rating.
Woodford, who has sent a dossier to Japan's Securities and Exchange Surveillance Commission (SESC) and is calling for the resignation of the Olympus board led by Chairman Tsuyoshi Kikukawa, said he was in touch with top Olympus shareholders.
And he vowed to return as chief executive if the board were removed, a forensic examination of company accounts were launched alongside an impairment test -- and the appropriate security arrangements were put in place.
"It's (Olympus) a fiefdom, a kingdom. Kikukawa is the emperor.
"The stating point is that you need to remove the directors of the company," he said. "That is not for me to decide. That is up to the shareholders.
"I think their (shareholder) concern is that I'm going to resign my legal directorship of the company. I reassured them that I wouldn't do that. Their interest is getting to the facts and the truth as to what has happened and they are communicating again with regulatory authorities themselves demanding that these things are addressed." ($1 = 76.780 Japanese Yen)
(Reporting by Kirstin Ridley; Editing by Alexander Smith)