A third-party panel investigating Olympus Corp. said Tuesday the company concealed investment losses up to ¥134.8 billion ($1.7 billion) through a string of questionable acquisitions.
In a 185-page report, the six-member panel—which includes lawyers, an accountant and a former Supreme Court justice—said it found no evidence of the involvement in the cover-up of "antisocial groups" a euphemism for organized crime. Neither did the panel discover any fresh off-the-book debt or inflated assets.
The outside panel, appointed by Olympus's board, appeared to unleash few major surprises in the report, although the company still faces ongoing investigations by several authorities including the Japanese police and the U.S Federal Bureau of Investigation.
"While we think we have an explanation of what happened, we can't say we have the specifics on everything," Tatsuo Kainaka, the panel's chairman and a former Supreme Court justice, said at a news conference.
Following the release of the panel's findings, the key question remains whether the company will be able to correct its past financial statements and whether auditors will be able to sign off in time to submit earnings results by Dec. 14.
Olympus shares will be delisted from the Tokyo Stock Exchange if it fails to meet the deadline. Shares could also be removed depending on the scope of the accounting misstatement.
Last month, the Japanese maker of cameras and medical-imaging equipment admitted to using a series of expensive acquisitions to clean up its books. The company's share price has more than halved since the Oct. 14 ouster of former chief executive Michael Woodford, who was fired after urging the company to look into the deals.
The deals under question include the acquisition of U.K. medical-technology firm Gyrus Group PLC and purchases of three small Japanese firms from 2006 to 2008.
The report identified former internal auditor Hideo Yamada and former vice president Hisashi Mori as the central figures behind the cover-up of assets, which the panel said began from the fiscal year starting in April 1998.
The panel also found that the scheme was approved by two former presidents—Tsuyoshi Kikukawa and his predecessor—and said the cover-up was aided by several former bankers.
"This isn't a scandal by the company as a whole...This was operated secretly by a very limited number of people," the panel said.
In 2008, Olympus bought Gyrus for $1.9 billion. Under the transaction, a little-known financial adviser based in the Cayman Islands received a total payout of $687 million—more than a third of the purchase price. That raised red flags, since such fees normally range between 1%-2%.
Olympus also bought three small Japanese companies for a total of ¥73.49 billion ($940.1 million) from 2006 to 2008 that had little discernible revenue or business history, and seemed peripheral to the company's core business. A year later, the company wrote down their value by nearly $700 million.
Third Party Investigation Report
Statement from Olympus
read more: Olympus Wealth Management
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