Tobashi scheme used to distort the profits and debts of Olympus that Michael Woodford exposed
Olympus scandal
Key players
Olympus Corporation: Michael Christopher Woodford, Tsuyoshi Kikukawa, Hisashi Mori, Hideo Yamada; Intermediaries: Hajime Sagawa, Akio Nakagawa, Nobumasa Yokoo Auditors: KPMG, Ernst & Young
Suspicious acquisitions
ITX (2003), Altis, Humalabo and News Chef (2005–2008), Gyrus Group (2008)
Missing assets
¥376 billion yen ($4.9 billion)[1]
Whistleblower
ex-CEO Michael Christopher Woodford (later won damages for wrongful dismissal)
Corporate casualties
Tsuyoshi Kikukawa, Hisashi Mori, Hideo Yamada and others
Official investigations
Serious Fraud Office, Federal Bureau of Investigation, Financial Services Agency, Tokyo Metropolitan Police, Securities and Exchange Surveillance Commission, Tokyo Stock Exchange
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The Olympus scandal was a case of accounting fraud exposed in Japan in 2011 at optical equipment manufacturer Olympus. On 14 October, British-born Michael Christopher Woodford was suddenly ousted as chief executive. He had been company president for six months, and two weeks prior had been promoted to chief executive officer, when he exposed "one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history", according to The Wall Street Journal.[2] Tsuyoshi Kikukawa, the board chairman, who had appointed Woodford to these positions, again assumed the title of CEO and president.[3][4] The incident raised concern about the endurance of tobashi schemes, and the strength of corporate governance in Japan.
Apparently irregular payments for acquisitions had resulted in very significant asset impairment charges in the company's accounts, and this was exposed in an article in the Japanese financial magazine FACTA and had come to Woodford's attention. Japanese press speculated on a connection to Yakuza (Japanese organised crime syndicates).[5][6] Olympus defended itself against allegations of impropriety.
Despite Olympus' denials, the matter quickly snowballed into a corporate corruption scandal[7] over concealment (called tobashi) of more than 117.7 billion yen ($1.5 billion) of investment losses and other dubious fees and other payments dating back to the late 1980s and suspicion of covert payments to criminal organisations.[6][8][9][10] On 26 October, Kikukawa was replaced by Shuichi Takayama as chairman, president, and CEO. On 8 November 2011, the company admitted that the company's accounting practice was "inappropriate" and that money had been used to cover losses on investments dating to the 1990s. The company blamed the inappropriate accounting on former president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive vice-president Hisashi Mori.
By 2012 the scandal had developed into one of the biggest and longest-lived loss-concealing financial scandals in the history of corporate Japan;[2] it had wiped 75–80% off the company's stock market valuation,[11] led to the resignation of much of the board and investigations across Japan, the UK and US. Among the people criminally charged in this scandal, only two securities brokers went to prison for 3–4 years.[12] A shareholder derivative suit in 2019 fined three Olympus board members for 59.4 billion yen (USD 594 million), the largest of its kind in Japanese history.[13] This scandal also raised considerable turmoil and concern over Japan's prevailing corporate governance and transparency[14] and the Japanese financial markets. Woodford received a reported £10 million ($16 m) in damages from Olympus for defamation and wrongful dismissal in 2012;[11][15] around the same time, Olympus also announced it would shed 2,700 jobs (7% of its workforce)[16] and around 40 per cent of its 30 manufacturing plants by 2015 to reduce its cost base.[17]
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The Olympusscandal was a case of accounting fraud exposed in Japan in 2011 at optical equipment manufacturer Olympus. On 14 October, British-born Michael...
Olympus Corporation (Japanese: オリンパス株式会社, Hepburn: Orinpasu Kabushiki-gaisha) is a Japanese manufacturer of optics and reprography products. Olympus was...
2011). "At Olympus, High Times, Dark Shadow". The Wall Street Journal. Retrieved 8 November 2011 Powell, Bill (9 November 2011) "OlympusScandal: A Confession...
individuals whose backgrounds are important to the understanding of the Olympusscandal, which was precipitated on 14 October 2011 when the company's British-born...
months. Within two months, he became a central figure in exposing the Olympusscandal, having been removed from his position after serving two weeks, when...
successfully steered Olympus, a Japanese company to fame, turned a whistleblower when even as a CEO of the firm, he exposed the financial scandal worth $1.7 billion...
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Retrieved August 26, 2013. Curwen, Lesley (November 15, 2011). "Former Olympus boss Woodford blows whistle on company". BBC News. Retrieved November 15...
Olympus CEO Michael Woodford blackmailed company management into appointing him CEO in exchange for promises to cover up an accounting fraud scandal....
splitting up in 2014. The band reformed in 2017 and released the album Olympus Sleeping in 2018. They are best known for the singles "Golden Touch", "In...
Sunrise", he became a spokesperson for commercials with Jun Ji-hyun for Olympus cameras and Kim Tae-hee for Daewoo Electronics's Klasse air conditioners...
an independent panel formed to investigate irregular payments made by Olympus which reported in December, KPMG's affiliate in Japan did not identify...
a PR machine for Japanese biz; it initially ignored the 2011 Olympus accounting scandal (which FT broke). Nikkei has also hardly covered the Takata airbag...
Guest Actress in a Comedy Series. Leo appeared in the action-thriller Olympus Has Fallen as Ruth McMillan, the Secretary of Defense who was held hostage...
Blog.lcs.on.ca. 21 July 2016. Retrieved 26 March 2017. "Matt Frewer on Olympus, Max Headroom, Orphan Black, and working with giant ants". SyfyWire. 2...
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Kan resigned, and Yoshihiko Noda became prime minister. Later that year Olympus Corporation admitted major accounting irregularities. (See Tobashi scheme...