Olympus has been embroiled in one of the largest scandals to hit the company's home nation. Olympus has admitted to
hiding growing loses from investors for decades with acquisition fees. As the company has investigated the case, its stock has lost much of its value during the scandal.
Olympus is now announced that it is suing its president and 18 other executives that currently work for the company and ex-workers for as much as $47 million in compensation. The investigation into the scandal had
urged legal action against those involved.
Olympus has also announced that all of its board members that are subject to the suite will leave the company in March or April.
Analyst Nicholas Smith, from CLSA in Tokyo said, "Essentially, everyone feels they are on death row. It does seem extremely strange to have the death row cell inside the company." He continued, "Having nobody at the helm makes it easier for a takeover."
With the announcement that Olympus was suing the executives that had anything to do with the accounting practices, the stock price surged.
Reuters reports that stock grew 28% on the news. Investors see the suit as a hope that the company can turn itself around and avoid being removed from the Tokyo Stock Exchange.
Olympus issued a statement about the executives that will resign that read in part, "The plan is for the current board members who were found responsible and are subject to lawsuits to complete passing on their roles to avoid any impact on business implementation, and all resign at an extraordinary shareholders' meeting that is set to be held in March or April."
In all, six of the 11 directors are being sued including five of the eight internal directors, and one of the three external directors. The suit includes former Chairman Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former internal auditor Hideo Yamada; these are the executives the outside investigation found played leading roles in the scheme. These three are targeted with the largest shares of the damage suit.
