Published November 08, 2011
By Kirstin RidleyThe former chief executive of Japan's embattled Olympus said on Tuesday the company's partners should come under close scrutiny after the camera and endoscope maker admitted it hid securities investment losses for two decades.
Michael Woodford, who was fired on October 14 after persistently asking why the company had spent around $1.3 billion on obscure fees and acquisitions, said questions remained to be answered about the money trail.
"You need forensic accountants going in there to find out where the money has gone, who has worked with Olympus, who has cooperated with Olympus, who has received fees from Olympus," he told Reuters Insider.
"Those are questions we need answered. And then we need an impairment test."
Woodford said he "absolutely" expected further revelations after the dramatic Olympus u-turn on Tuesday, at which President Shuichi Takayama blamed former chairman Tsuyoshi Kikukawa, Vice-President Hisashi Mori and internal auditor Hideo Yamada for a cover-up.
"You've got the world's most eminent media organizations, you've got external enforcement and regulatory agencies involved in this. I think we will see things move very quickly."
Woodford expects Britain's Serious Fraud Office (SFO) to decide within days whether to launch a formal investigation alongside the U.S. Department of Justice (DoJ), the Securities and Exchange Commission, the Federal Investigation Bureau (FBI) and Japan's Securities and Exchange Surveillance Commission.
An SFO spokesman said only that the SFO was continuing to consider the matter, although he added that the agency was considering a public announcement on its decision -- a move lawyers believe points to a likely investigation.
Woodford said it was "ludicrous" and "offensive" that Kikukawa and Mori remained company directors despite admitting to their part in the scandal. But he said Takayama was also compromised, as was the rest of the board, for not heeding his demands for answers.
"A teenager could work out you don't pay nearly three quarters of a billion dollars in fees to an unknown party ... The quiet men are just as bad as the noisy ones in this story," he said.
Although Kikukawa resigned last month as president and chairman and Mori was fired earlier on Tuesday, both remain directors unless they resign from the board or are fired by shareholders. Woodford also remains a board director.
Woodford brushed off questions about whether he might also be personally investigated. "Why would I have any motive? I have no fears whatsoever," he said.
"I don't want to indulge in my own feelings, but it's proven what I was saying was true."
(Reporting by Kirstin Ridley; Editing by Jon Loades-Carter)