Olympus Corp’s former chairman Tsuyoshi Kikukawa received three years jail time suspended for five years for his involvement in the 1.7 billion dollar accounting fraud, the biggest case of corporate fraud in Japanese history. Executive Vice President Hisashi Mori and former auditing officer Hideo Yamada also received suspended sentences for their respective roles in the financial cover-up.
The camera maker itself, whose shares plunged 80% because of the scandal, was ordered to pay fines amounting to 7 million dollars by Tokyo District Judge Hiroaki Saito today. The decision came two years after whistle-blower Michael Woodford revealed that the company submitted falsified financial reports to hide their investment losses for the past 13 years. Woodford, the first foreign head at Olympus, was terminated after he started investigating the suspicious practices he observed in the company. The executives admitted to the fraud when they could not find a way out of it, and pleaded guilty in front of a judge last September. He admitted that what they did “destroyed the image of Japanese companies internationally.”
Olympus eventually settled with Woodford and paid him 15.6 million dollars as compensation for his wrongful termination. They were also fined 2.4 million dollars by Japan’s financial regulators. The company is still facing several lawsuits from investors, including State Street Bank and Trust & Co. and Government of Singapore Investment Corporation Pte Ltd. They are seeking 190 billion dollars in damages in their joint complaint.
[ via Business Week ]