Resignations

"As we have troubled our customers, business partners and shareholders over a series of press reports and a slump in share prices, chairman and president Tsuyoshi Kikukawa today returned his titles, as well as his right to representation ...

Mr Kikukawa will become a director without executive rights ...Shuichi Takayama, a current director, will replace him as president."

— Olympus statement announcing departure of Kikugawa^[39]

Then, at a press conference in Tokyo on 27 October, the president Takayama blamed Woodford for the decline in the company's share price, saying "If this secret information had not been leaked, there would have been no change in our corporate value." Takayama said the amounts paid for Gyrus "will pay off considering what value we will gain from the Gyrus acquisition in the future."^[40] He further justified the purchase of the three small Japanese companies as part of a strategy "to find new growth areas to reduce our over-reliance on the endoscope business."^[40][41] However, Mori, who was the main speaker, and Takayama were criticised by impatient journalists for their responses that meandered without addressing the issues.^[42]

Olympus president Takayama bows in apology over the company's "highly inappropriate disposal"

Olympus delegated the task of selecting members to its third-party panel to investigate the allegations to two men who were appointed to the board in June – Yasuo Hayashida, physician who is visiting professor at Juntendo University, and Hiroshi Kuruma, a former executive at the Nikkei business daily.^[43] On 1 November, Olympus announced the composition of its third-party panel, headed lawyer and former Supreme Court justice, Tatsuo Kainaka. The panel would include four lawyers and one certified public accountant.^[43][44]

In the week of 6 November, Olympus announced that Hisashi Mori had been dismissed; auditor Hideo Yamada had resigned. At a press conference, Takayama revealed he had known “absolutely nothing” about the scheme until Mori informed him earlier in the week.^[2][45] He said Kikugawa, Mori and Yamada were not responsible for the initial investments, but had covered up the losses "with the company's best interests at heart".^[46]

"It has become clear that advisory fees and funds used to buy back preferred shares in the acquisition of Gyrus, as well as funds used in the purchase of three new domestic businesses ...  were used, among other things, to dispose of unrealised losses on securities, the reporting of which had been put off"

— Olympus statement about advisory fees, November 2011^[45]

At the news conference, Takayama bowed as he apologised for the "highly inappropriate disposal" of the losses.^[45] The Financial Times said Takayama had not addressed "the size and origin of Olympus’ past losses; the identity of the executives who approved the initial cover-up; the exact means by which it was executed; and the reason it took so long to dispose of the bad assets."^[46]

Ahead of the much-awaited board meeting on 25 November, to be attended by Woodford, two directors – Kikukawa and Mori – announced their resignation; Yamada, who enjoyed observer status on the board, also resigned. Separately, current president Shuichi Takayama said the board members would resign once "the path to Olympus' revival became clear." However, Woodford said: "If they have an iota of care for the company then they should ... resign in the near future."^[47]

Date: 2015-01-29; view: 668