Shares in Olympus falls 20 percent after scandal
TOKYO - Agence France-PresseShares in Japanese camera maker Olympus endured another double-digit plunge in Tokyo trade yesterday amid uncertainty over the firm’s future after it admitted covering up losses since the 1990s.
Olympus shares dived 20.43 percent to close at their daily lower limit at 584 yen yesterday, after plummeting 29 percent one day earlier.
The company on Nov. 8 admitted to hiding losses on securities investments dating back to the 1990s and said it did this by using funds related to four controversial acquisitions.
It was its first acknowledgment of wrongdoing since the company ousted its first non-Japanese chief executive, Michael Woodford, on October 14, when the scandal first erupted after he publicly raised questions about the payments.
Since then around 76 percent has been wiped from the value of Olympus shares with investors unsatisfied with the efforts of management to explain the payments or give more details as to what losses have been covered up.
Olympus has yet to reveal its losses, but Japanese media reported on Wednesday that it may have concealed more 100 billion yen ($129 million) in losses from its past securities investments.
Analysts said the future of the 92-year-old optical equipment maker was now clouded and many investors fear it may even face the possibility of delisting from the Tokyo Stock Exchange once investigators get to the bottom of the issue.
Olympus said on Nov. 8 the investment losses -- which had been kept off the books -- were then covered up by funneling money through funds paid in the acquisition of Gyrus Group PLC and expensive purchases of three small Japanese firms.
The four deals include a $2 billion deal for British medical-instruments company Gyrus, in which Olympus has admitted paying $687 million to a little-known financial adviser based in the Cayman Islands.
The fee totaled more than a third of the company’s purchase price, much larger than the one or two percent normally charged in acquisition deals.
Also under scrutiny are the purchases of three small Japanese companies unrelated to its core precision instruments business for a total of 73.49 billion yen ($941 million at current rates).
The company heavily wrote down their value a year later.
Olympus president Shuichi Takayama bowed in apology to reporters for what he called “inappropriate” practices at the camera and endoscope maker, exposing one of Japan’s biggest loss-hiding schemes in recent years.