The UK’s Serious Fraud Office (SFO) has dropped its case against Olympus which was caught in one of Japan’s biggest financial scandals four years ago

The SFO found there was not enough evidence to prosecute the camera maker under English law.

In 2011, Olympus whistleblower Michael Woodford was sacked after raising suspicions over $687 million in advisory fees paid in connection with Olympus’s acquisition of UK medical firm Gyrus Group Ltd in 2008.

The Gyrus fee raised suspicions of wrongdoing because it represented around 35% of the entire value of the $2 billion Gyrus takeover.

Separately, Olympus was found to have used a complex web of financial transactions to help cover up, in its accounts, huge investment losses dating back to the 1990s.

The SFO launched an investigation two years ago after Woodford, former Olympus president and CEO, submitted documents to its offices in London shortly after he was fired in October 2011.

The alleged accounting offences relating to Gyrus were said to have taken place between April 2010 and March 2011.

The Gyrus Group faced four criminal charges and Olympus one charge.

The firms were charged with offences of making a ‘misleading, false or deceptive’ statement to an auditor.

However, the SFO – which launched its investigation on 9 November 2011 – said today: ‘The SFO today offered no evidence against Olympus Corporation and Gyrus Group Ltd, which had been charged with offences of making misleading statements to auditors.

‘This decision follows consideration of a Court of Appeal judgment in the case handed down in February 2015, which ruled that English law does not criminalise the misleading of auditors by the company under audit.’

The SFO added that it ‘could not have prosecuted individuals in this case because Japan does not extradite its nationals’.

Reporting restrictions on the case were lifted today.

In a statement, Japan-based Olympus said today: ‘The Company [Olympus] and GGL [Gyrus] co-operated fully with the Serious Fraud Office’s investigation but did not accept that the offences with which they were charged could, as a matter of law, be made out against them.’

 

Exposure bookThe scandal was made public by former Olympus CEO Michael Woodford who later wrote a book about it