Editing Olympus Corporation (section)

== Scandals ==
=== 2011 accounting scandal ===
{{main|Olympus scandal}}

In 2011, the company [[Olympus scandal|attracted worldwide media scrutiny]] when it [[Termination of employment|fired]] its newly appointed English chief executive (CEO) [[Michael Christopher Woodford]], a 30-year Olympus veteran, for [[retaliation|probing]] into financial irregularities and unexplained payments totaling hundreds of millions of US dollars. Although the [[corporate board|board]] initially dismissed Woodford's concerns via mass media as "disruptive" and Woodford himself as failing to grasp the [[Intercultural competence|local culture]], the matter quickly [[snowball effect|snowballed]] into a [[corporate corruption]]<ref name="Source Name 1">{{cite news|url=https://www.bbc.co.uk/news/business-18258542 |title= Former Olympus boss Michael Woodford gets settlement |work=BBC News|date= 30 May 2012 }}</ref> [[List of corporate collapses and scandals|scandal]] concerning alleged [[Tobashi scheme|concealment]] of more than ¥117.7&nbsp;billion ($1.5&nbsp;billion) in [[derivative (finance)|investment losses]], [[kickback (bribery)|kickbacks]], and [[money laundering|covert payments]] to [[Yakuza|criminal organizations]] dating back as far as the 1980s.<ref name=telegraph20111021 /><ref name="sobleFT" /><ref name=telegraph20111023 /><ref name="independent-threats" /> One of the longest-lasting [[accounting scandals]] in Japanese corporate history,<ref name=wsj20111107 /> the incident wiped out over three-quarters of the company's [[company valuation|valuation]]<ref name="guardian1" /> and led much of the board to [[resignation|resign in disgrace]]. Investigations were launched across Japan, the United Kingdom, and the United States, culminating in the arrests of [[List of people involved in the Olympus scandal|numerous]] corporate [[Director (business)|directors]], senior managers, [[auditor]]s, and bankers<ref name="reutersarrests" /> and raising significant concerns over prevailing standards of [[corporate governance]] and [[corporate transparency|transparency]],<ref name=econ20120216banyan>Banyan (16 February 2012). [https://web.archive.org/web/20120306045047/http://www.economist.com/blogs/banyan/2012/02/olympus-scandal "Arrested development"]. ''The Economist''. Archived from [https://www.economist.com/blogs/banyan/2012/02/olympus-scandal the original] on 6 March 2012.</ref> as well as the state of Japanese [[financial market]]s. Woodford himself, who stated he had received [[death threat]]s for his role in [[whistleblower|exposing]] the [[cover-up]],<ref name="independent-threats">{{cite web|url=https://www.independent.co.uk/news/people/profiles/michael-woodford-unbowed-despite-the-death-threats-6280816.html |archive-url=https://ghostarchive.org/archive/20220523/https://www.independent.co.uk/news/people/profiles/michael-woodford-unbowed-despite-the-death-threats-6280816.html |archive-date=23 May 2022 |url-access=subscription |url-status=live|title=Michael Woodford: Unbowed despite the death threats|work=The Independent|date=22 December 2011}}</ref> was reportedly awarded £10&nbsp;million ($16&nbsp;million) in [[damages]] for [[defamation]] and [[wrongful dismissal]].<ref name="guardian1">{{cite news|title=Former Olympus chief gets £10m payoff|url=https://www.theguardian.com/business/2012/jun/08/former-olympus-chief-payout-michael-woodford|date=8 June 2012|newspaper=The Guardian|access-date=14 December 2012}}</ref><ref>{{cite web|url=http://japandailypress.com/out-of-court-settlement-for-ex-olympus-ceo-michael-woodford-292883/|archive-url=https://web.archive.org/web/20120602012211/http://japandailypress.com/out-of-court-settlement-for-ex-olympus-ceo-michael-woodford-292883|url-status=usurped|archive-date=2 June 2012|title=Out-of-court settlement for Ex-Olympus CEO Michael Woodford?|work=The Japan Daily Press|date=30 July 2020}}</ref> In the wake of this turmoil, Olympus announced plans to shed 2,700 jobs (seven percent of its workforce)<ref>{{cite news| url=https://www.bloomberg.com/news/2012-06-07/olympus-may-unveil-job-cuts-turnaround-plan-at-meeting-today.html | title=Olympus to Cut 2,700 Jobs, Consider Alliances to Boost Capital | date=8 June 2012}}</ref> and shut 40 percent of its 30 manufacturing plants by 2015.<ref>{{cite web |url=http://www.thejakartapost.com/news/2012/06/08/olympus-whistleblower-wins-millions-settlement.html |title=Olympus whistleblower wins millions in settlement |date=8 June 2012 |access-date=8 June 2012 |archive-date=22 August 2012 |archive-url=https://web.archive.org/web/20120822074809/http://www.thejakartapost.com/news/2012/06/08/olympus-whistleblower-wins-millions-settlement.html |url-status=dead }}</ref> 

On 1 April 2011, [[Michael Christopher Woodford]], 51, was named president and chief operating officer – the first ever foreigner to hold the position – replacing Kikukawa, who became chairman. Woodford, an Olympus veteran of 30 years, was previously executive managing director of Olympus Medical Systems Europa. Olympus appointed Woodford its CEO six months later, but the board suddenly removed him as chief executive two weeks into the job, while allowing him to retain his board seat.<ref name=cfo20111024p1>Bacani, Cesar (24 October 2011) [http://www.cfoinnovation.com/content/olympus-scandal-when-foreign-ceo-rebels?section=features "The Olympus Scandal: When a Foreign CEO Rebels" (pg 1)]. ''CFO Innovation Asia''. Retrieved 24 October 2011</ref>

Woodford alleged that his removal was linked to several prior acquisitions he questioned, particularly the US$2.2&nbsp;billion deal in 2008 to acquire British medical equipment maker Gyrus Group. [[Thomson Reuters]] reported that US$687&nbsp;million was paid to a middle-man as a [[Contingent fee|success fee]] – a sum equal to 31% of the purchase price, and which ranks as the highest ever M&A fee.<ref name=cfo20111024p1/> According to the ''[[Daily Telegraph]]'', some of the sums paid out relating to the acquisition of a technology company ITX were also under examination.<ref name=telegraph20111023/> Woodford noted that an article in Japanese financial magazine ''Facta'' in July prompted his suspicion of the transactions.<ref name=cfo20111024p3/> Reports also said the company acquired three other Japanese companies outside its core business, and recognised that the assets were worth US$721&nbsp;million less than their acquisition value 12 months previously.<ref name=bw20111027/>

Shareholders expressed concern after Olympus's share price nearly halved in value following the Woodford revelations, and asked for "prompt action".<ref name=telegraph20111021/><ref name=cfo20111024p1/> Following his dismissal, Woodford passed on information to the British [[Serious Fraud Office (United Kingdom)|Serious Fraud Office]], and requested police protection. He said the payments may have been linked to "forces behind" the Olympus board.<ref name=telegraph20111021>Russell, Jonathan (21 Oct 2011). [https://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/8840675/Olympus-launches-investigation-into-MandA-fees.html "Olympus launches investigation into M&A fees"]. ''The Daily Telegraph''. Retrieved 24 October 2011.</ref> Japanese newspaper ''[[Sankei Shimbun|Sankei]]'' suggested that a total of US$1.5&nbsp;billion in acquisition-related advisory payments could be linked to the [[yakuza]].<ref name=telegraph20111023>Russell, Jonathan (23 Oct 2011). [https://www.telegraph.co.uk/finance/financial-crime/8843231/Huge-Olympus-fees-have-underworld-links.html "Huge Olympus fees have 'underworld links'"]. ''The Daily Telegraph''. Retrieved 24 October 2011.</ref>

The company responded on 19 October that "major differences had arisen between Mr. Woodford and other management regarding the direction and conduct of the company’s business". On the Gyrus acquisition, it also declared the Audit Board's view that "no dishonesty or illegality is found in the transaction itself, nor any breach of obligation to good management or any systematic errors by the directors recognised."<ref name=cfo20111024p1/> On 26 October, the company announced that to assuage shareholders' concerns, Kikukawa resigned as chairman; he was replaced by Shuichi Takayama. Olympus shares rebounded 23 percent.<ref name=bw20111027>Yasu, Mariko (27 October 2011). [https://web.archive.org/web/20111028202100/http://www.businessweek.com/news/2011-10-27/olympus-stock-surges-as-kikukawa-quits-woodford-heads-to-fbi.html "Olympus's Kikukawa Quits as Axed Woodford Takes Case to FBI"], ''Bloomberg BusinessWeek''. Retrieved 27 October 2011</ref><ref>Cheesman, Chris (26 October 2011). [http://www.amateurphotographer.co.uk/news/Olympus_quit_over_widespread_concerns_news_310193.html "Olympus chairman quit over 'widespread concerns'"] {{Webarchive|url=https://web.archive.org/web/20111030102543/http://www.amateurphotographer.co.uk/news/Olympus_quit_over_widespread_concerns_news_310193.html |date=30 October 2011 }} ''Amateur Photographer''. Retrieved 27 October 2011</ref>

On 8 November 2011, the company admitted that the money had been used to [[tobashi scheme|cover losses on investments]] dating to the 1990s<ref name="sobleFT">{{cite web|last=Soble |first=Jonathan |url=http://www.ft.com/cms/s/2/8745be6a-09af-11e1-a2bb-00144feabdc0.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/2/8745be6a-09af-11e1-a2bb-00144feabdc0.html |archive-date=10 December 2022 |url-access=subscription |url-status=live |title=Olympus used takeover fees to hide losses |work=Financial Times  |date=29 September 2011 |access-date=8 November 2011}}</ref> and that company's accounting practice was "not appropriate", thus coming clean on "one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history", according to the ''Wall Street Journal''. The company laid the blame for the inappropriate accounting on ex-president Tsuyoshi Kikukawa, auditor Hideo Yamada, and executive VP Hisashi Mori.<ref name=wsj20111107>{{cite web|url=https://online.wsj.com/article/BT-CO-20111107-719199.html |title=Olympus President: Will Do Utmost To Avoid Delisting |work=The Wall Street Journal |date=7 November 2011|access-date=8 November 2011}}</ref>

On 21 December 2011, Japanese authorities, including the Tokyo prosecutor's office, the Tokyo Metropolitan Police and the Japanese Securities and Exchange Surveillance Commission, raided the company's offices in Tokyo.<ref name=cnn20111221>{{cite news|url=http://www.cnn.com/2011/12/21/business/japan-olympus-raid/index.html?hpt=hp_bn2 |title=Japanese authorities raid Olympus offices |publisher=CNN |date=21 December 2011|access-date=24 December 2011}}</ref>

In February 2012, seven Olympus executives were arrested by Japanese police and prosecutors. Former president [[Tsuyoshi Kikukawa]], former executive vice president [[Hisashi Mori]], and former auditor [[Hideo Yamada]] were taken into custody on suspicion of violating the [[Financial Instruments and Exchange Law]], along with former bankers [[Akio Nakagawa]] and [[Nobumasa Yokoo]] and two others, suspected of having helped the board hide significant losses.<ref name="reutersarrests">{{cite news|url= http://uk.reuters.com/article/us-olympus-idUKTRE81E22120120216|archive-url= https://web.archive.org/web/20160425021102/http://uk.reuters.com/article/us-olympus-idUKTRE81E22120120216|url-status= dead|archive-date= 25 April 2016| title=Former executives, bankers arrested over Olympus fraud | work=Reuters| date=15 February 2012}}</ref>

On 25 September 2012, the company and Kikukawa, Yamada, and Mori pleaded guilty to collusion to submit false financial reports.<ref>{{cite news | title=Ex-Olympus execs plead guilty to hiding losses | date=September 26, 2012 | url=http://www.japantimes.co.jp/text/nb20120926a2.html | archive-url=https://archive.today/20130218152025/http://www.japantimes.co.jp/news/2012/09/26/news/ex-olympus-execs-plead-guilty-to-hiding-losses/%23.USJGnH3LdRw | archive-date=February 18, 2013 | url-status=dead | work=japantimes.co }}</ref>

On 1 March 2016, Olympus agreed to pay $646&nbsp;million of fines to US authorities.<ref name="CNNmoney">{{cite web|url= https://money.cnn.com/2016/03/02/news/companies/whistleblower-olympus-medical-equipment/index.html?sr=fbmoney030216whistleblower-olympus-medical-equipment1011PMVODtopLink&linkId=21850622| title=Whistleblower wins $51 million in kickback and bribery case | publisher=CNN| date=2 March 2016|author-first1=Chris|author-last1=Isidore}}</ref>

=== 2024 CEO resignation ===
On October 28, 2024, CEO Stefan Kaufmann was forced to resign by the Olympus board of directors after allegations of purchasing illegal narcotics. Preceding executive Yasuo Takeuchi was assigned the new CEO. Share prices dropped by 6% following the news.<ref name="Reuters">{{cite web|url= https://www.reuters.com/business/healthcare-pharmaceuticals/olympus-says-ceo-steps-down-after-allegations-illegal-drug-purchase-2024-10-28/ | title=Olympus CEO resigns after allegations of illegal drug purchase, shares tumble| publisher=Reuters| date=28 October 2024}}</ref> On November 28 a 44-year old man was re-arrested on drug dealing and extortion charges, allegedly forcing Kaufmann to pay 9,150,000 yen across 23 payments as hush money.<ref name="tokyonp">{{cite web|url=https://www.tokyo-np.co.jp/article/370223| title=オリンパス元社長に「口止め料」要求、違法薬物を用意していた男を恐喝容疑で再逮捕 被害915万円か | publisher=Tokyo Shimbun| date=28 November 2024}}</ref><ref name="Asahi">{{cite web|url= https://www.asahi.com/ajw/articles/15509804 | title=Authorities push cocaine case against former CEO of Olympus| publisher=Asahi Shimbun| date=13 November 2024}}</ref> Kaufmann was later sentenced by the Tokyo District court to 10 months in prison. The presiding judge commented: "It is clear he had a deep involvement with illegal drugs and was dependent on them."<ref name="jt">{{cite web|url= https://www.japantimes.co.jp/news/2024/12/27/japan/crime-legal/olympus-ex-ceo-ruling/ | title=Ex-Olympus CEO Kaufmann gets suspended sentence over drugs| publisher=Japan Times| date=27 December 2024}}</ref>