Former Olympus President Arrested

The former president of scandal-wracked Olympus has been arrested in Tokyo over a massive financial cover-up at the firm, Japanese media reported yesterday. Tsuyoshi Kikukawa, who has been named as a key player in a scheme to shift US$ 1.7 billion of losses from the camera-maker’s balance sheets, was taken into custody for questioning, several broadcasters and news wires reported.

Earlier, Nikkei business daily Jiji Press said prosecutors were believed to have begun questioning former members of the company’s management, including Kikukawa. The paper said those being questioned looked likely to be arrested.

Another report in the Asahi Shimbun said prosecutors plan to indict Kikukawa and two other executives. Kikukawa (70), former vice president Hisashi Mori (54), and former auditing officer Hideo Yamada (67), allegedly violated a law that bans falsification of securities registration statements, the reports said.

Olympus’s admission that a small group of top executives used overpriced deals to cover up bad investments dating back to the 1990s has shaken confidence in Japanese corporate governance.

The firm eventually admitted in early November that it had hidden the losses after the allegations were first aired by Michael Woodford, when he was ousted as chief executive and president the month before. Following his sacking, Woodford launched aggressive international media offensives against his former bosses, questioning the firm’s past acquisition deals and the outsized consultant fees it had paid. channelnewsasia.com