Professional Documents
Culture Documents
Olympus Fraud Fraud
Olympus Fraud Fraud
Scandal
OVERVIEW
I. Background
Services
Corporate Governance
II. Perpetrators and Schemes
Tobashi Schemes
III. The Wistleblower
IV. IV. Aftermath
I. Olympus Corporation
A Japan-based manufacturer of optics and reprography products.
Established on 12 October 1919, initially specializing in microscope and
thermometer businesses.
Enjoys a majority share of the world market in gastro-intestinal endoscopes.
It has a roughly 70% share of the global market whose estimated value is
US$2.5 billion.
Its global headquarters are in Shinjuku, Tokyo, Japan.
Corporate Governance
Japan has been caught between its traditional model of a board of
directors that actively manages the corporation (the management
model) and the American model of a board that focuses on the
monitoring and supervision of management (the monitoring model).
C
HAJIME SAGAWA ran a U.S. investment firm that earned a
O massive $687 million fee for advising Olympus in a 2008
N acquisition deal that ranks as the largest advisory payment in
S history. The fee was among several vehicles used by Olympus
to disguise securities losses.
U
L AKIO NAKAGAWA performed "portfolio reshuffling" for his
T Japanese corporate clients, and had long-standing relationship
with Olympus. Made use of Bermuda-based funds valued at
A "hundreds of millions of dollars" to manage its balance sheet
N using Japanese accounting loopholes.
T
AKINOBU AND NOBUMASA YOKOO were brothers involved
S in venture capitalist funding from Cayman Islands.
1980:
President: Toshiro Shimoyama
Yamada - Executive VP
Mori - Corporate Director
BUT
Late 1990s:
Continued to incur losses- up to 100 billion Yen
Losses were masked through a Japanese Accounting
Standard
financial assets are accounted of at historical basis
versus writing them down to a lower market value
In 1997: Accounting laws were
modified
1. Central Forest
2. Easterside Investments
3. Quick Progress
Central Forest
(1998)
Cayman Islands
Obtained financing from a bank in
Liechtenstein
31 Billion Yen
As collateral: Olympus-owned Japanese govt bonds of 21Billion
Yen
Also invested 35 Billion Yen class fund in this bank
Used a bank in Singapore to get another 45 Billion Yen into the
dummy entity
In 1998: Succeeded in hiding losses
- combined Book Value of 64 Billion Yen
in Central Forest
Easterside Investments
- British businessman
- Worked for 30 years in Olympus
- Formerly president and COO (April 2011) and CEO
(October 2011) of Olympus Corporation
- First non-Japanese person to be appointed as the
company's CEO in October 2011
- Became the whistleblower against Olympus
Woodfords Appointment
as CEO