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Olympus Probe Panel Said to Issue Report Soon as This Week

Olympus Probe Panel Said to Issue Report Soon as This Week
Olympus has said it plans to correct previous earnings statements after admitting on Nov. 8 that it had falsified its accounts to hide investment losses dating back decades. Photographer: Tomohiro Ohsumi/Bloomberg

Olympus Corp.’s independent panel investigating acquisitions and accounting by the Japanese camera maker may release findings as early as this week, a person involved in the investigation said.

The committee plans to complete its report before Olympus announces earnings, the person said, asking not to be identified because the probe is confidential. The investigation is ongoing, so the report could be delayed, the person said.

The Tokyo Stock Exchange has said that 92-year-old Olympus must submit second-quarter results by Dec. 14 or it will be delisted. Olympus has said it plans to correct previous earnings statements after admitting on Nov. 8 that it had falsified its accounts to hide investment losses dating back decades.

Olympus reaffirmed it plans to meet the deadline in a statement to the exchange today. The shares fell as much as 13 percent in early Tokyo trading after the Wall Street Journal reported the company may struggle to file in time. Olympus gained 2.2 percent as of the 3 p.m. close of trading in Tokyo.

“Investors bought back into the stock after Olympus said it may still meet the deadline,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “It’s too early to say that the company will be fine, even if it successfully files in time. It’s a game for speculators now.”

Share Slump

The shares slumped as much as 81 percent after the company’s board on Oct. 14 dismissed then-Chief Executive Officer Michael C. Woodford over questions he raised about the accounting and acquisitions. The stock is still down 59 percent.

Olympus set up the panel on Nov. 1 to investigate questions raised by losses and transactions related to acquisitions, including $687 million in payments to advisers in the purchase of Gyrus Group Plc in 2008.

The committee, headed by former Supreme Court Judge Tatsuo Kainaka, has interviewed executives including Woodford, former Chairman Tsuyoshi Kikukawa and Hisashi Mori, the executive vice president dismissed over his part in the schemes to cover up losses.

“The company isn’t in the position to comment on the committee’s probe,” Olympus spokesman Tsuyoshi Kitada said.

The group will make its report public first before submitting it to the company’s board, the person involved in the investigation said.

Previous Probe

Olympus commissioned an earlier investigation into the acquisitions in 2009. That report was submitted to the board and wasn’t made public until this year, when Woodford publicly questioned the Gyrus transaction following his dismissal.

The company, also the world’s largest maker of endoscopes, has declined to make public details of any wrongdoing or the extent of hidden losses until the probes are completed.

Olympus President Shuichi Takayama has blamed Kikukawa, Mori and auditor Hideo Yamada for the cover-up.

Woodford said he met for two hours yesterday with U.S. prosecutors and investigators for the Securities and Exchange Commission in New York.

He arrived at the U.S. Attorney’s Office in Lower Manhattan for a briefing with eight investigators from the Justice Department, the Federal Bureau of Investigation and the SEC, he said in an interview yesterday. It was Woodford’s second meeting with prosecutors; a prior meeting lasted three hours, he said.

International Investigation

“Different elements or parts of the Olympus story appeal to different jurisdictions,” Woodford said, declining to detail his talks with the U.S. government. “I’ve passed on everything I know.”

Woodford, who remains an Olympus board member, has also met with Japanese investigators, the U.K.’s Serious Fraud Office and members of Olympus’ independent panel probing $687 million in payments to advisers Axes America LLC and Axam Investments Ltd.

In a separate interview with Bloomberg Television yesterday, Woodford said that Japanese authorities told him last week that they “will follow this through to the end.”

“The tone from the top is very clear,” he said. “Every stone must be turned.”

Jerika Richardson, a spokeswoman for U.S. Attorney Preet Bharara in New York, and SEC spokesman John Nester declined to comment on yesterday’s meeting.

Woodford may pursue legal action against Olympus for firing him.

“In good time I will follow that through,” he said. “I will preserve my legal position.”

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