* Olympus board members bow to shareholders in apology
* Shareholders approve new board, restated accounts
* Ex-CEO fresh start claims are a “mockery”
* Woodford says may seek legal cancellation of EGM
* Olympus shares up 6.4 pct
By Tim Kelly and Yoko Kubota
TOKYO, April 20 (Reuters) – Shareholders of Olympus Corp
approved a new board on Friday, hoping for a fresh
start at the camera and medical device maker that hid $1.7
billion of investment losses in Japan’s biggest corporate
scandal in decades.
At a sometimes rowdy extraordinary meeting in a Tokyo hotel,
local institutional investors and Olympus’ lenders and suppliers
voted for a new management slate and approved five years’ worth
of restated company accounts.
The firm’s British ex-CEO, whose dismissal six months ago
blew the lid off the accounting scandal, said he may seek to
have the vote annulled as Olympus executives refused to explain
why he had been sacked for “gross misconduct”. Woodford has
begun legal action against his former employer in Britain.
While Olympus will hope the vote draws a line under a
scandal that has wiped more than $4 billion off its market
value, Woodford and foreign investors, who own 25-30 percent of
the company, have sought a change in a deep-rooted culture of
cross-shareholdings and cosy ties between banks and boardrooms.
Olympus’ new president will be 30-year company veteran
Hiroyuki Sasa, and new chairman is Yasuyuki Kimoto, a
63-year-old former executive from the Sumitomo Mitsui Financial
Group (SMFG), owner of a 3.4 percent stake and the
company’s main lender with $2.8 billion in outstanding loans and
bonds.
Big lenders such as SMFG and Mitsubishi UFJ Financial Group
(MUFG) are often key investors in Japanese companies,
giving them influence in board decisions – close ties that were
welcomed by shareholders arriving for Friday’s meeting.
“The banks are there … they will help in terms of
capital,” Eiichi Suzuki, 60, told Reuters. “The company already
has first-class technology, so now it’s a matter of management.”
Sasa said his mission was to “fix the damaged brand and win
back trust as soon as possible.”
Woodford, who has said he feared for his life during the
early days of the scandal and has since rushed to print his
book, “Terminated”, on the affair, said it was a “mockery” for
Olympus to claim it was making a new start. “It’s why the world
looks on and continues to think this world works in a completely
different way, it’s Alice in Wonderland,” he told reporters.
At the start of the 3-hour meeting, which drew a crowd of
1,000 shareholders, outgoing Olympus president Shuichi Takayama
and his board stood and bowed deeply in a traditional gesture of
public apology.
Woodford told the meeting that refusing to explain his
sacking “will constitute clear grounds for this EGM to be later
cancelled in court.”
He later told Reuters he would discuss the issue with
lawyers. “When they have lost nearly $2 billion, is the new
management going to accept that my dismissal was related to
telling the truth and apologise or are they going to support
this bunch of yes men and the ludicrous statements they have
been making,” he said.
INVESTIGATIONS
Since Woodford was fired on Oct. 14, Olympus has admitted it
used improper accounting to conceal massive investment losses
under a scheme that began in the 1990s. Law enforcement agencies
in Japan, Britain and the United States are investigating. Seven
people have been arrested, including a former chairman.
High on the new board’s to-do list will be whether to seek a
cash injection, possibly through a capital tie-up in its medical
business. Sony, Panasonic and Fujifilm
have been cited as potential partners.
Olympus’ restated earnings statements showed net assets
dwindled to 46 billion yen as of end-September. The company’s
equity ratio of just 4.4 percent, compared with about 30 percent
at its rivals, suggests it needs to raise some 150 billion yen
($1.84 billion) in fresh equity.
Olympus shares jumped 6.4 percent on Friday, their biggest
gain in three months. The stock slumped 80 percent as the
accounting fraud unfolded in October, but has since rallied to
half the pre-scandal level, valuing the company at $4.1 billion.
Olympus has estimated a $410 million loss for the year just
ended. Before the scandal it had forecast a profit of $221
million.
