More than 70 billion yen ($909.58 million) paid by Olympus Corp. in the acquisition of three Japanese start-ups between 2006 and 2008 was funneled into six investment funds based in the Cayman Islands and elsewhere.
The huge sum, accounting for nearly all of the total of 73.4 billion yen paid by Olympus in the deals, came on top of the 66.6 billion yen that Olympus paid to an advising company when it acquired the British medical equipment company Gyrus Group Ltd. in 2008.
The Gyrus Group has been at the center of a storm over Olympus' murky acquisitions triggered by the abrupt dismissal of Michael Woodford as the company's president on Oct. 14.
Most of the Gyrus payment is known to have been used to help cover up losses, with the objective of shoring up Olympus’ mainstay business. By contrast, the purpose of the acquisition of the three Japanese start-ups remains unclear.
A third-party panel set up by Olympus on Nov. 1 to investigate its past acquisitions is following that money trail.
The three start-ups--Altis Co., a resource recycling company; Humalabo Co., a health food sales company; and News Chef Inc., a cookware manufacturer--were acquired by Olympus and became its subsidiaries between 2006 and 2008.
Olympus officials have said they do not know who held the shares of the three companies that Olympus purchased. However, in-house documents acquired by The Asahi Shimbun indicate that funds with English names account for most of the previous shareholders of the three companies that sold stocks to Olympus.
For example, Dynamic Dragons II SPC and three other funds, all based in the Cayman Islands, were the previous shareholders of News Chef and sold their stakes to Olympus.
Tensho Ltd., one of the three other funds with holdings in News Chef, had stakes in all three start-ups and received more than 500 million yen. The fund has since been deregistered.
The presence of six similar funds has been confirmed. They received a combined sum of more than 70 billion yen for their holdings in the three companies from Olympus.
A special investigative team at the Tokyo District Public Prosecutors Office is set to question Tsuyoshi Kikukawa, who resigned as Olympus chairman and president on Oct. 26, and other key figures in the scandal on a voluntary basis. Criminal charges have not been ruled out.
Kikukawa is accused of masterminding the cover-up of Olympus’ losses together with Hisashi Mori, who was dismissed as executive vice president on Nov. 8, and corporate auditor Hideo Yamada. Prosecutors are thought to have questioned Mori on Nov. 18.
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