Olympus Panel Blames Auditors for $109 Million in Losses From Cover Up

Olympus Corp. (7733), the Japanese camera maker that hid $1.7 billion in losses, faulted five internal auditors for the fraud and said KPMG Azsa LLC and Ernst & Young ShinNihon LLC weren’t responsible.

An panel the company set up to investigate the fraud determined that five internal auditors are culpable for 8.4 billion yen ($109 million) in costs related to the cover-up of losses, Olympus said today in a statement. The company filed a lawsuit in Tokyo District Court against the internal auditors seeking a combined 1 billion yen in damages, Olympus said in a separate statement today.

President Shuichi Takayama is scheduled to disclose what else the company will do in response to the panel’s findings tomorrow, Tokyo-based Olympus said. The company, also the world’s biggest maker of endoscopes, last week sued 19 current and former executives including Takayama over their roles in concealing losses in a scandal that has led to a drop of about $4 billion in Olympus’s market value.

Olympus declined 2.1 percent to 1,156 yen at the 3 p.m. close of Tokyo trading. The stock has dropped 53 percent since former Chief Executive Officer Michael Woodford was fired Oct. 14, and as details of the fraud emerged and the Tokyo Stock Exchange put Olympus on a watchlist for possible delisting.

The panel’s probe found Minoru Ota, a former internal auditor at Olympus who headed its accounting unit until 2001, responsible for 3.7 billion yen of fees and other costs related to the cover-up, the largest amount among the five people, Olympus said in the statement.

The other four auditors, Tadao Imai, Makoto Shimada, Yasuo Nakamura and Katsuo Komatsu, didn’t fulfill their duties and were responsible for the remaining 4.7 billion yen of cover-up expenses, the company said.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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