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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