Print 6 comment(s) - last by DanNeely.. on Dec 6 at 6:40 PM

One bit of good news from the independent panel's report was that no connection to organized crime was found, after many suspected "yakuza" involvement

A damning report on digital camera maker Olympus' financial scandal has been released by an independent panel, and it’s calling for legal action against those involved.

A six-man panel prepared the report, which is over 200 pages long, after Olympus CEO Michael Woodford was fired only two weeks into the job. Olympus said he was fired due to his management style, but Woodford insisted it was because he uncovered an accounting scandal that was covered up for two decades and amounted to $1.7 billion.

The report listed 10 reasons as to why and how the scandal occurred, such as poor personnel management, risky securities investments in the 1980's and incompetent external auditors.

"The core part of management was rotten and the parts around it were contaminated by the rot," said the panel in its most recent report. "In the worst possible sense, the situation was that of the tribal culture of the Japanese salaryman."

The report called for legal action against Olympus executives who were part of the cover-up, and also pointed fingers at auditors who never voiced any wrongdoing.

Specifically, the panel blamed former executive vice president Hisashi Mori and ex-internal auditor Hideo Yamada for the company's accounting cover-up. 

Olympus is now developing a committee that will dig deep into the investigation to find all of those involved in the cover-up, including auditors from KPMG AZSA and Ernst & Young ShinNihon. The panel also pushed for a spring-cleaning in the boardroom.

Shuichi Takayama, current Olympus president, said he is ready to take legal action against those involved in the scandal.

The report praised Woodford for standing up for what was right, but Woodford believes the new report has brought nothing new to the table.

"Past [Olympus] presidents had low esteem for transparency and governance, and standing up to them to speak the truth meant you risked being put out to pasture, which is apparent from what happened to Woodford," said the report.

Woodford said he finds it "boggling" that the board members are still running the company after all of these recent findings. Woodford has called for the resignation of board members as well as an extraordinary shareholders meeting.

"I will be coming back to Japan soon in relation to meeting with shareholders and potential new investors," said Woodford.

Many leading shareholders have requested that Woodford return to his post as company CEO, but Woodford recently attended a "chilly" board meeting where the topic of his returning as CEO was never mentioned.

One bit of good news from the independent panel's report was that no connection to organized crime was found, after many suspected "yakuza" involvement.

Source: Olympus

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The sad thing is...
By MrBlastman on 12/6/2011 12:31:57 PM , Rating: 5
Stuff like this goes on all the time in executive circles and they get away with it... for years, sometimes indefinitely. The other sad thing is stuff like this (or of such magnitude) goes on at our Congressional level and due to them being above the law... they never pay for their crimes.

You're either the one bent over the barrel or the one giving it to the one bent over from behind it seems.

I'm glad their ex-CEO has pushed this as far as he has. The Olympus board and their executives should pay for this.

RE: The sad thing is...
By Omega215D on 12/6/2011 1:07:24 PM , Rating: 2
Of course he probably screwed himself out of potential upper management or CEO jobs as no one likes a whistle blower.

RE: The sad thing is...
By MrBlastman on 12/6/2011 1:24:45 PM , Rating: 5
He probably did given how much of a club these circles are. In life though, there are sometimes things far more important than earning a ton of money. Preserving your character and integrity is one of those such things.

RE: The sad thing is...
By guffwd13 on 12/6/2011 2:55:49 PM , Rating: 4
Hear, hear!

I don't hate execs and wall street because of what they do. They do exactly what their job strives to do. I hate them because they represent modern human society, or maybe its just human nature in general that thinks money is the ultimate form of success.

It's not the money you make you should strive for, its how you make that money. Even Steve Jobs once said, "I don't care if I'm the richest man in the cemetery."

RE: The sad thing is...
By DanNeely on 12/6/2011 6:40:23 PM , Rating: 3
It depends. He's probably never going to get a job offer at companies doing stuff that's even slightly questionable. At the same time he's got an excellent targeted resume for companies trying to recover from a scandal or who pride themselves on being squeaky clean.

RE: The sad thing is...
By danjw1 on 12/6/2011 2:02:28 PM , Rating: 2
I don't know who would be better to clean the company up, then the guy that outed them. If Olympus has any hope of getting investors willing to put money into the company, they need this guy back in there. Hopefully, the investors understand this and throw the board out, and bring Mr. Woodford back to fix it. I think it is the only hope they will ever be trusted again.

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