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Former Olympus CEO Michael Woodford  (Source: mcall.com)
Authorities are looking into why Olympus paid a fee that amounted to about a third of the value of the acquisition when these fees are usually only about 1 percent

Olympus Corp. has gained a bit of attention lately from authorities in Britain and Japan who are looking into a 2008 takeover of medical equipment maker Gyrus. Now, the U.S. Federal Bureau of Investigation is getting a piece of the action by probing a questionable fee associated with the acquisition.

Just last week, it was announced that Olympus CEO Michael Woodford was fired after only two weeks on the job. While Olympus says it fired him over disagreements regarding management style, Woodford said it was because he discovered payment discrepancies and called on senior executives to resign.

Woodford involved authorities from Britain and Japan to look into a payment concerning the $2.2 billion acquisition of Gyrus in 2008. The payment in question is a $687 million fee to advisors in the Gyrus takeover, which is the largest fee on record. Authorities are looking into why Olympus paid a fee that amounted to about a third of the value of the acquisition when these fees are usually only about 1 percent.

Woodford said the advisory firms involved in the acquisition were AXES America LLC and AXAM Investments Ltd.

Last week, Olympus said it would carry out its own review of past acquisitions, but Woodford provided documents that show a review already carried out in 2009, which showed no "management wrongdoing."

However, Olympus replaced its auditors in 2009 and went to third party external panel in May 2009. Olympus said its replacement of auditors in 2009 had nothing to do with the Gyrus takeover.

Woodford suggested the camera company switched auditors from KPMG AZSA & Co. to Ernst & Young in 2009 because of disagreements concerning the Gyrus acquisition. KPMG had reportedly advised Olympus against making part of the advisory payment in preferred stock, although the preferred stock increased in value and made up a large amount of the advisory payment.

Olympus said it replaced auditors because KPMG's contract was up at that time.

According to Woodford's documents, Olympus used a three-person external panel in May 2009 to review the Gyrus acquisition as well as three other deals. The reviews found no wrongdoing.

After much investor-related pressure, Olympus announced it would set up an external panel of lawyers and accountants to look into its past acquisitions. Olympus admitted to paying two obscure firms the large fees, and denies any discrepancies. The investigation now continues with the FBI's involvement.

With the investigation underway, Olympus shares have closed down 10.7 percent at 1,099 yen each Monday and even hit a low of 1,012 yen, which was its weakest price since March 1998.

Sources: Reuters, The Washington Post



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Bwahahaha. Take that 'Good ol Boy Club!'
By priusone on 10/24/2011 1:54:18 PM , Rating: 4
So, the former CEO was trying to do his job, wasn't able to, so he did what was right. No wonder he got fired. I've run up against the GOB Club, and I'll tell you what, they are the reason the world is such a shitty place.

(After all, Dictators are part of a GOB Club, so are politicians, etc)




By Bioniccrackmonk on 10/24/2011 9:08:04 PM , Rating: 3
quote:
So, the former CEO was trying to do his job, wasn't able to, so he did what was right


The article states he was on the job for two weeks. He did not have enough time to not do the job right.


Who is Axes America LLC?
By bigdawg1988 on 10/24/2011 1:51:06 PM , Rating: 2
According to Manta: Axes America LLC in New York, NY is a private company categorized under Financial Advisory Services. Current estimates show this company has an annual revenue of less than $500,000 and employs a staff of approximately 1 to 4.

I know Manta isn't always accurate, but wouldn't a company (Axes) that large have a website or something? Looks like others are wondering what's up also. Wonder who's going to the pokey?
http://forums.dpreview.com/forums/read.asp?forum=1...




RE: Who is Axes America LLC?
By MrBlastman on 10/24/2011 3:09:14 PM , Rating: 2
"Axes America LLC in New York, NY is a private company categorized under Financial Advisory Services. Current estimates show this company has an annual revenue of less than $500,000 and employs a staff of approximately 1 to 4. Companies like Axes America LLC usually offer: Christian Financial Planning, Online Financial Planning, Residential Outdoor Lighting, Home Equity Loan Refinancing and Divorce Financial Planning."

Hmm... yeah. Someone is going to jail soon?


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