Olympus recently employed an outsider in their ranks, a British CEO. He had helped to restructure the loss making camera division and was hands-on in going about it. This had begun to upset the conservative management in Tokyo who, in a shock move, decided to fire him unanimously.
Now it appears the true reason for his firing was that he’d uncovered a huge skeleton in the closet.
In amidst the acrimonious fallout, a letter leaked by someone close to the ousted CEO claims the crusty Japanese management siphoned off no less than 2 years worth of profit ($675 million) to a secret Caymans Island entity which disappeared 2 weeks later.
After a heated confrontation in Tokyo last week the board told Woodford to get a shuttle to the airport and never to return.
The motion to sack a CEO is highly unusual in Japanese business where change is handled with great care and loyalty is valued. According to Jon Snow’s interview above, Woodford was confronted in a corridor afterwards by a smiling employee asking for the company credit card and apartment keys back.
As soon as he returned to the UK, Woodford contacted the serious fraud office and tasked accountancy firm Price Water Cooperhouse to investigate the payment.
The investigation is outlined in a leaked letter and is, it is claimed, extremely damaging – indicting the Olympus board in serious crime.
As a result of the allegations Olympus’s value has collapsed, dropping a huge 10% as the news broke. In a further escalation of the crisis today the share price has collapsed a full 50% wiping $3.2 billion from the value of the company and seriously threatening the whole corporation.
The camera division is even more vulnerable, since it is currently loss-making (incredibly) despite the success of Micro Four Thirds cameras like the EP series.
It would be extremely sad for Olympus to collapse, leaving thousands of talented people at the top of their game without work. Some have been with the company a life time and have a deep attachment both personally and culturally to the organisation.
But the question of the missing $657 million remains unexplained and the subsequent strange behaviour of the board has baffled shareholders….