Olympus Chairman Kikukawa resigns

On October 14, 2011, the Board of Olympus Corporation fired the company’s then-President and CEO Michael Woodford, saying he had largely diverted from the rest of the management team in regard to the management directions and method sand was now causing problems for decision making by the management team. Woodford, however, said he was sacked for questioning a surprisingly high amount of US-$ 687 million of fees paid to financial advisors in conjunction with the US$ 2.2 billion acquisition of the British medial equipment specialist, Gyros in 2008. Most of the sum was paid to a company based on the Cayman Islands, which was closed just two months after the transaction was complete. Since the acquisition of the Gyros group was conducted under British law, Woodford called to the British Serious Fraud Office in London for investigation. According to published reports, the US Federal Bureau of Investigation (FBI) is also looking into the matter.

Woodford also pointed at the circumstances of the acquisition of three smaller Japanese companies by Olympus in 2008, which the company took over in 2008 for US$ 800 million, just to write down their values by 67 percent or US-$ 600 million in the very same year.

In a letter to Chairman Kikukawa dated October 11, 2011, Michael Woodford asked Olympus Chairman Kikukawa and Executive Vice President Hisashi Mori to resign from the Olympus Board in order to “allow the situation to be managed in a discrete manner”. Three days later, the Board dismissed Michael Woodford.

In several statements, Olymus said the numbers cited by Woodford were correct, adding that all mergers and acquisitions had been carried out under appropriate procedures and processes as well as proper accounting practices. On demand of shareholders, however, the company established an independent committee to investigate the procedures. Since October 14, Olympus’ stock fell more than 50 percent. Today, “in consideration of the wide-spread concerns to Olympus’ stakeholders caused due to the recent serious media reports and fall in stock prices triggered by the company’s change in president on October 14, 2011”, Chairman Tsuyoshi Kikukawa stepped down from his positions as Chairman, President and CEO.