Executives in Olympus Fraud Case Receive Suspended Sentences
Three executives, including the former chairman of Olympus, have been found guilty of abetting a US$1.7 billion cover-up. All three will receive suspended sentences, which means they are likely to avoid going to prison.
The three executives are Tsuyoshi Kikukawa, the former chairman of Olympus, Hideo Yamada, a former auditing officer, and Hisashi Mori, a former vice president. Kikukawa and Yamada received suspended three-year sentences, while Mori received a lesser suspended sentence. Olympus was ordered by the Tokyo District Court to pay 700 million yen in fines for falsifying its financial reports.
In 2011, Michael Woodford, the first non-Japanese to become the CEO of Olympus, confronted Japanese Olympus executives and board members over questionable deals in Olympus' history. Woodford was promptly fired by the board, barely two weeks into the job. Kikukawa, the chairman at the time, then took over as president and CEO of Olympus.
Woodford then went to the press, and Tsuyoshi Kikukawa resigned his positions in October of 2011. One month later, the company admitted wrongdoing in the accounting scandal. Kikukawa, Yamada and Mori (among others) were arrested by the Japanese authorities in early 2012.
Kikukawa had pleaded guilty to his charges. Tokyo prosecutors had asked for a five-year jail term for Kikukawa and a 1 billion yen fine for Olympus, but Judge Hiroaki Saito said the former executives had simply taken over a scheme started by their predecessors, and there was no evidence that either of the three executives had personally benefited from the deals.
Last year, Olympus was fined 192 million yen by Japan's financial regulators, and still faces lawsuits from investors. The Federal Bureau of Investigation is also investigating the case and in December 2012 arrested a former bank executive in connection with the case.
Source: New York Times