Report released on Olympus’s investment loss cover-up

Shareholders now want to revamp the entire board

After a month-long investigation into Olympus Corp.’s massive cover-up of investment losses, a report was released yesterday by an independent panel claiming three former chairmen, three senior aides and other governing members of the Japanese company who did nothing to stop it were “rotten to the core,” and that everyone involved should be “fully eliminated.”

The inquiry began as a result of the October dismissal of former Olympus president Michael Woodford, who publicly questioned millions of dollars that the camera maker spent while acquiring Gyrus Group Plc, a medical equipment manufacturer, in 2008. Woodford has since been meeting with the Securities and Exchange Commission. Then, in November, Olympus made an about-face and admitted to using acquisitions of other companies to cover up decades worth of losses, which the company had been vehemently denying up to that point.

The panel report revealed that Japanese advisers to the company were hiding impaired financial securities using offshore companies in the Cayman Islands and British Virgin Islands, Bloomberg reports. The report alleges that the Olympus board had become a mere formality, a roundtable made up of “yes men.” Following the release of this report, shareholders are now calling for a revamp of the company’s board and management, to restore its market value and avoid having its stock delisted from the Tokyo Stock Exchange.

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