Entire Olympus Board Quits, Risks Foreign Backlash With New Board Line-up 0

The Olympus scandal continues to unfold, but there’s less of a scandal and more of a resolution nowadays. You might recall that Olympus was in deep trouble after it was revealed that they had been covering up around $1.7 billion in their company’s finances since the 1990s.

Private equity firms and rival companies have since been looking to invest in the beleaguered company. A month later, seven former Olympus executives, including former CEO Tsuyoshi Kikukawa, were charged with fraud.

Olympus Entire Olympus Board Quits, Risks Foreign Backlash With New Board Line up

Now it has been announced that the entire Olympus board has quit, after nominating a new president and chairman for the company. Hiroyuki Sasa, who is from the company’s medical equipment marketing division, has been chosen to be the next president, while banker Yasuyuki Kimoto has been chosen as chairman. These are both subject to a vote at Olympus’ April 20 shareholders’ meeting.

Major foreign shareholders had earlier pushed to have “fresh, outside talent” for these two key positions.

Josh Shores, senior analyst and principal at Southeastern Asset Management, one of the largest foreign investors in Olympus, expressed their disappointment:

“We are extremely disappointed with the composition of the proposed board. While suggestions that the board be entirely new individuals, with a split chairman and CEO role have been taken into account, the clear creditor orientation of the board is unacceptable.”

Former Olympus Chief Executive Michael Woodford, who was instrumental in uncovering Olympus’ financial scandal, also commented:

“Looking at capital raising, to have a representative of the bank there as the chairman will only frustrate and alienate any independent foreign shareholder, and I’m sure shareholders in Japan. It’s completely and utterly wrong.”

[Reuters] and [New York Times]