OLYMPUS HAS unveiled an overhaul of its board and management as the camera maker seeks to restore public trust following a damaging accounting scandal.
But it has appointed a chairman linked to its biggest creditor despite concerns by foreign shareholders over such a move.
Olympus is seeking to restore faith in its governance after it admitted last year it had secretly moved more than 100 billion yen of securities-related investment losses off its books since the 1990s, then used acquisitions as cover to square the hidden accounts.
Japanese authorities arrested seven people in connection with the scandal this month, including a former chairman and outside financial advisers.
Shuichi Takayama, Olympuss caretaker president, plans to resign along with 14 other directors and three statutory auditors, after a civil investigation commissioned by the company issued a damning report in December accusing management of being “rotten at the core”.
The Japanese camera maker said yesterday that Yasuyuki Kimoto, a former director of Sumitomo Mitsui Bank would become chairman, while Hiroyuki Sasa, an Olympus executive officer, would be promoted to president.
Of the 15 directors and auditors on the new board, 11 will be from outside the company, compared with five previously. Independent directors include current and former executives of Mitsubishi UFJ bank, Kao, Asahi Kasei, Itochu and other blue-chip Japanese companies. One auditor hails from Nippon Life, an insurer that is also a major Olympus shareholder. The appointments must be ratified at a shareholders’ meeting scheduled for April.
In spite of the increase in the number of outsiders, the changes have worried foreign investors. They fear that bank-nominated executives lacking experience of managing a manufacturer would be unable to provide the strategic leadership Olympus needs.
Olympus has also said it is looking for ways to raise capital, a situation that often puts lenders and shareholders at odds. Banks are likely to prefer that Olympus issue stock rather than seek new loans, a method that would dilute the value of existing shareholders stakes. – Copyright The Financial Times Limited2012
