Michael C. Woodford resigned as a director of Olympus Corp. in the first step of a campaign to take control of the camera maker from the board that fired him as chief executive officer in a dispute over falsified accounts.
“I will come together with a new slate of directors,” Woodford said in an interview in New York yesterday. Resigning “allows me to talk to all parties at Olympus.”
Shareholders should be given a chance to vote for new management after Olympus admitted former Chairman Tsuyoshi Kikukawa and senior aides colluded to cover up losses dating back to the 1990s, Woodford said. Southeastern Asset Management Inc., Olympus’s largest overseas stockholder, joined Woodford in calls for a change of management.
“Olympus needs a new board of trustworthy and credible directors and corporate auditors with a majority of independent directors,” Josh Shores, a London-based principal at Southeastern, said in an e-mail statement today. “A new slate of directors proposed only by the current board would not be sufficient.”
Woodford was fired after questioning $1.4 billion in takeover costs now at the center of criminal investigations. Olympus confirmed it accepted his resignation as a director, according to a statement to the Tokyo Stock Exchange.
“I remain completely committed to Olympus and, if the shareholders decide, very much want to return,” Woodford said in an e-mail statement. “I would like nothing more than to return to Olympus and lead it toward” regaining its reputation as “a world-class organization which is the envy of its competitors,” he said in the statement.
Woodford met with the Federal Bureau of Investigation, the Department of Justice and the Securities and Exchange Commission in the U.S. this week, following meetings with Japanese police and regulators last week, to discuss payments made in the purchase of Gyrus Group Plc and stake writedowns in three other takeovers.
The stock of the 92-year-old camera and endoscope maker has slumped 58 percent since Woodford was fired, on concerns about the scale of the losses, the threat of delisting and continuing criminal investigations. Olympus rose 2.3 percent to 1,049 yen at close of trading in Tokyo.
Woodford met with President Shuichi Takayama and other directors at a board meeting in Tokyo last week and pledged to work to avoid delisting. The company must report earnings by a Dec. 14 deadline set by regulators to avoid being removed from public trading.
An independent panel investigating acquisitions and accounting that the company set up on Nov. 1 may report its findings as early as tomorrow, according to a person with direct knowledge of the matter.
The committee, headed by former Supreme Court Judge Tatsuo Kainaka, has interviewed previous executives including Woodford, Kikukawa and Hisashi Mori, the executive vice president dismissed over his part in the schemes to cover up losses.
Olympus is also forming two teams to improve corporate governance and business structure that will be led by Takayama, the company said two days ago.
“It’s completely inappropriate for the current management team, who are tainted by its past mistakes, to make choices about the identity of new board members,” Woodford said in the statement. “I intend to liaise with all interested stakeholders with a view to formulating a proposal for the constitution of a new board.”