Britainu2019s Serious Fraud Office (SFO) is to prosecute Olympus over the financial scandal that rocked the camera company in 2011, the Japanese firm said today.
[UPDATED 10.10am] Olympus whistleblower Michael Woodford, who was based in Japan, 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 later 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 alleged accounting offences relating to Gyrus are said to have taken place between April 2010 and March 2011.
The SFO has confirmed that the Gyrus Group faces four criminal charges and Olympus one charge.
The firms have been charged with offences of making a ‘misleading, false or deceptive’ statement to an auditor.
The SFO launched its investigation after Woodford, former Olympus president and CEO, submitted documents to its offices in London shortly after he was fired in October 2011.
Olympus said in a statement: ‘Having completed its investigation, the SFO has decided to bring a prosecution against the company and Gyrus Group Ltd (GGL), a UK subsidiary of the company, on charges of breaching Section 501 of the UK Companies Act of 2006.’
The firm admits that the ‘financial impact of this prosecution on Olympus Group’s business is unclear’, given that ‘it is difficult to predict the outcome of this matter or estimate the level of fines that may be imposed on the company and GGL’.
The statement, issued by Olympus’s Japanese headquarters in Tokyo, continues: ‘The charges against the company and GGL allege that certain representations made to the auditors of GGL in the documents related to GGL’s financial accounts for the fiscal years 2009 and 2010 were misleading, false or deceptive in a material particular, contrary to Section 501 of the UK Companies Act of 2006.’
Last year, former Olympus president Tsuyoshi Kikukawa pleaded guilty in connection with the accounting scandal, along with former executive vice-president Hisashi Mori and Hideo Yamada, a former Olympus auditor.
The SFO says the first hearing is due to take place at Westminster Magistrates’ Court in London on 10 September.
The SFO launched its investigation on 9 November 2011.
The Olympus scandal was one of the largest in Japanese corporate history and there are plans to make a film about it.