TOKYO – Scandal-hit Olympus said on Tuesday it has discovered that funds related to its acquisition of British medical equipment maker Gyrus in 2008 and of three domestic firms were used to cover losses on securities investments dating back to the 1990s.
The acquisitions are at the centre of a high-profile governance scandal that followed the dismissal of its British CEO Michael Woodford and has cut the market value of the camera and endoscope maker by more than half.
The 92-year-old company said in a statement it would hold a news conference at 12:30 p.m. (0330 GMT) to elaborate on the matter, which it said had come to light as part of its cooperation with a third-party panel set up to investigate the transactions.
"Through this process (of the third-party investigation), we found that from the 1990s the posting of losses on securities investments had been deferred," the company said in a statement.
The firm has come under increasing pressure to disclose more information to address shareholder concerns in an escalating scandal that has wiped around $4 billion off its market value and prompted law enforcement agencies in Japan and the United States to investigate.
Shares in Olympus opened untraded due to a glut of sell orders after the announcement.
The company had suddenly fired Woodford on Oct. 14, saying he failed to understand the company's management style or Japanese culture.
Woodford said he was forced out for questioning astronomical fees paid in the $2 billion acquisition of Gyrus, as well as the acquisitions of three small Japanese firms whose value had been largely written off after the purchases.
Prodded by institutional shareholders, Olympus named six men, including a former Japanese supreme court justice, to investigate the past M&A deals in which it has been accused of making unjustifiably large payments. (Writing by Linda Sieg; Editing by Michael Watson and Edmund Klamann)