Three former executives of Japanese camera maker Olympus sentenced for fraud
04 Jul 2013
Three former executives of Japanese camera maker Olympus have been awarded suspended jail terms for their roles in an accounting scandal.
Former chairman Tsuyoshi Kikukawa and executives Hisashi Mori and Hideo Yamada last year pleaded guilty to charges that they falsified accounts to cover up losses of $1.7 billion.
Kikukawa and Yamada were given three-year sentences, while Mori was given a two-and-a-half-year sentence.
Olympus was ordered to pay 700 million yen in fines for its role, in the scandal, one of the biggest financial frauds in Japan's history.
The scandal hit the headlines in 2011 following the dismissal of the then chief executive Michael Woodford from his post after challenging Kikukawa and the board over massive payments related to acquisitions. ( Also see: Woodford gives up fight to return as CEO of Olympus, warns of legal action news)
An investigation launched thereafter revealed a cover-up of losses dating back to the 1990s.
The arrests of Kikukawa, former executive vice-president Mori and a former auditing officer Yamada came in February last year. They were later indicted on suspected violation of the Financial Instruments and Exchange Act after they admitted to hiding losses in September last year.
(Also see: Former Olympus chairman, six others arrested in Japan)
The scandal also hit Olympus shareholders, with the firm losing around 80 per cent of its value in the aftermath of the revelations.
Olympus is also the world's largest maker of endoscopes.
Judge Saito said in court today, ''Kikukawa and Yamada succeeded in a negative legacy and weren't involved in the decision-making process to hide losses''. ''They were distressed and didn't benefit personally from hiding losses. Mori followed their orders,'' he added.
The development, however, does not spell the end to the company's troubles, as it faces lawsuits by investors, including State Street Bank and Trust & Co and Government of Singapore Investment Corporation Pte Ltd in a joint complaint seeking 19.1 billion yen in damages.
Kikukawa and Yamada have been awarded three years of jail time suspended for five years, while Mori has been given two-and-a-half years jail time suspended for four years.
Kyodo News reported on 26 March that prosecutors had asked for a five-year jail term for Kikukawa and a 1 billion yen fine for Tokyo-based Olympus.
Kikukawa told the court in September when pleading guilty with other executives, that the fraud, ''destroyed the image of Japanese companies internationally.''
Olympus was down 0.9 per cent at 3,170 yen at the close in Tokyo trading.
Kikukawa stepped down in October 2011, weeks following the board firing Woodford, who uncovered the fraud and went public after the Olympus board refused to act.
