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Olympus whistleblower seeks answers

Reported by AAP
Friday, April 20, 2012
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Michael Woodford, who blew the whistle on an accounting scandal at Olympus Corp, has taken a stand at its shareholders' meeting and demanded to know why he was fired as chief executive.

The Japanese camera and medical-equipment maker was seeking shareholder approval on Friday for new management after executives behind a cover-up of massive investment losses were forced out.

Woodford was fired in October after he blew the whistle on Olympus's dubious accounting.

Tokyo-based Olympus has acknowledged it hid 117.7 billion yen ($A1.4 billion) in investment losses dating back to the 1990s.

Olympus declined to answer Woodford's question, saying the issue was pending litigation in Britain where the former CEO is contesting his dismissal.

The company proposals, including the approval of new management, were all passed without problem by enthusiastic clapping from about 1000 people attending the three-hour annual general meeting, despite spurts of shouting from naysayers.

Olympus had a solid lock over investor votes because of Japanese institutional investors such as banks, and other support through a "cross-shareholding" system whereby companies own shares in each other.

Reporters watched the shareholders meeting on monitors in a separate room at the same hotel.

The new 11-member board has eight outside members including a former executive at Sumitomo Mitsui Banking Corp, Olympus's main bank, as chairman. The key executives suspected of engineering the deception have resigned.

A handful of angry shareholders got up and demanded to know why the company had allowed the scandal to happen.

One suggested Woodford be reinstated on the board, along with Masaharu Hamada, an Olympus employee who has won a court case for being unfairly penalised as a whistleblower on an issue unrelated to the cover-up of losses. The company is appealing.

"They have a high sense of ethics," said the shareholder, identified by only his surname Yamaguchi.

That proposal was soundly defeated by clapping.

Woodford, a Briton and a rare foreigner to lead a major Japanese company, has already conceded he won't be making a comeback at Olympus.

But he said he would contest the company's refusal to answer his question as violating a law in Japan that protects shareholders. He did not elaborate what he planned to do.

"Hundreds of billions of dollars in shareholder value have already been lost by this scandal," said Woodford, referring to the plunge in the company's share price.

He had previously criticised the shareholders meeting as a Kabuki-like charade.

Woodford also criticised how two old-guard executives remained with the company.

"How dare you, shame on you," he shouted, his voice shaking with anger.

Olympus outgoing president Shuichi Takayama, who hosted the meeting, said they remained because they had not been implicated in the scandal.

Three former Olympus executives, including the company's ex-chairman, were arrested this year on suspicion of orchestrating the cover-up. The company has carried out its own investigation and is suing some executives for damages.

Takayama and the new president, Hiroyuki Sasa, reiterated the company's view that it will fix its corporate governance and boost profitability under new management.

After his appointment won shareholder approval, Sasa said he was deeply sorry for the scandal that had caused trouble to many people and had affected the value of the company.

24/10/2014 00:03Sydney, Australia. 24 October,2014
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