NARITA--Former Olympus Corp. CEO Michael Woodford said on Nov. 23 that Tokyo police were best able to get to the truth behind one of Japan's biggest accounting scandals, as speculation mounts of possible links to organized crime.
Woodford, whose ouster as Olympus CEO a month ago spurred revelations of accounting tricks at the camera and endoscope maker, also told reporters on arrival at Tokyo's Narita international airport that he believed the company's shares should not be delisted but that it needed new management.
Woodford is returning to Japan for the first time since his sacking on Oct. 14, to meet prosecutors, regulators and police who are together investigating the scandal, in which Olympus has admitted to hiding losses for two decades and to using merger and acquisition payments to help aid the cover-up.
"The metropolitan police to me is the one that probably has the capability to investigate this in the right way," he said.
Woodford, a Briton, on Friday will also attend his first board meeting since it convened to oust him. Still a director despite his sacking as CEO, Woodford had refused to return to Japan earlier, saying he was concerned for his safety.
Speculation of organized-crime links have swirled around the Olympus scandal. The firm on Nov. 21 said a third-party panel it set up to investigate the matter had, so far, found no evidence that organized crime syndicates or "yakuza" gangsters were involved in the M&A payments.
The payments included a massive $687 million advisory fee paid mostly to an obscure Cayman Islands firm.
The panel is due to report its findings in early December.
Olympus has lost nearly two-thirds of its market value since Woodford blew the whistle on a series of strange deals.
The 92-year-old company initially denied any wrongdoing but later admitted to hiding investment losses from investors since the 1990s and to using part of $1.3 billion in M&A payments made over the past five years to help in the concealment.
The company, also being probed by the U.S. Federal Bureau of Investigations and Britain's Serious Fraud Office, risks being delisted from the Tokyo Stock Exchange over the scandal.
It is not yet clear if the architect of Woodford's ouster, former Chairman and President Tsuyoshi Kikukawa, who also remains a director, will also attend the Nov. 25 board meeting.
Olympus shares jumped 20 percent to 869 yen on Nov. 22 as traders speculated the company might avoid being delisted from the Tokyo Stock Exchange, despite being engulfed in an accounting scandal.
Olympus, a maker of cameras and medical equipment, is under investigation by regulators, prosecutors and organized-crime police. The scandal broke when CEO-turned-whistleblower Michael Woodford publicly questioned the company's accounts after being fired last month.
"I was invited to the board meeting on Friday by Olympus and welcome the opportunity of going to Japan," Woodford, a Briton, told Reuters in London on the eve of his departure for Tokyo.
The trip will be his first to Olympus headquarters since his sacking at a board meeting just over five weeks ago.
Woodford has been cast by two major foreign shareholders as the best man to lead a clean-up of the 92-year-old company, which has lost about 65 percent of its market value since he went public with his concerns about improper accounting.
Goldman Sachs is now the second-biggest shareholder in Olympus, a public filing showed on Nov. 22. The Wall Street bank has a 6.67 percent stake, second in size to Mitsubishi UFJ Financial Group's 7.61 percent holding.
Goldman spokesman Michael DuVally said the bank bought Olympus shares from clients in the normal course of business as a market maker and was not making a strategic investment.
Other big players, such as Morgan Stanley, also appear to have been buying up the stock on behalf of clients, market sources said.
Olympus, which at first denied any wrongdoing, this month admitted to hiding investment losses from investors for two decades and to using some of $1.3 billion in unusual merger and acquisition payments to help in the cover-up.
It was not immediately clear whether the man who presided over Woodford's sacking, former chairman and president Tsuyoshi Kikukawa, would also attend the board meeting. Kikukawa quit as chairman over the scandal last month but remains a director.
Speculation about organized-crime links has swirled around the Olympus scandal, but the firm said on Monday that a third-party panel it set up to investigate the matter had, so far, found no evidence that funds from its M&A deals went to organized crime syndicates or that "yakuza" gangsters were involved.
The panel's report is due in early December.
Woodford has cited unspecified security concerns for his decision to leave Japan in a hurry after he was sacked. But he said on Monday he was comfortable about returning and reiterated his willingness to "go back and run" the company.
"I'm reassured about the security. The Japanese authorities are aware and arrangements have been made that I'm satisfied with," the 31-year Olympus veteran said.
Woodford, who remains a director, would not discuss the agenda of the board meeting, saying only that it would be an opportunity to "ask my colleagues to do the best for Olympus."
During his visit this week, Woodford will meet Japanese police and other authorities, he has said.
SPECULATION OVER ORGANIZED CRIME
The scandal at the once-proud firm has rekindled concerns about lax corporate governance in Japan and revived worries about links between companies and organized crime.
A unit from the Tokyo Metropolitan Police Department's organized crime division has joined the investigation, a source familiar with the matter said on Friday. But the source added it was premature to say if gangsters were involved.
Speculators who believe Olympus' core medical equipment business still has value have been betting that executives responsible for the scandal will bear the brunt of any punishment and that the company can escape with a fine.
Olympus has admitted to improperly accounting for M&A payments going back to 2006. A large share of these payments went to obscure Cayman Islands companies that have since closed, making it difficult to trace the money.
Tokyo prosecutors have already questioned former vice-president Hisashi Mori on a voluntary basis, Japanese media say, and are expected to soon question Kikukawa and internal auditor Hideo Yamada.
Olympus' new president, Shuichi Takayama, has blamed the three for the cover-up, saying he would consider criminal complaints against them.
Mori was sacked as an executive this month but, like Kikukawa, he remains a director. It is unclear whether Mori will attend this week's board meeting.
The Tokyo exchange has placed Olympus on a watch-list as a possible prelude to delisting. If the firm misses a Dec. 14 deadline for filing its financial statements for the six months to September, it will be automatically delisted.
Even if Olympus meets the deadline, the bourse can still delist the stock depending on the scale of its past financial misstatements or if the firm is found to have done business with organized crime syndicates.
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