THE JAPANESE authorities yesterday arrested seven central figures in the accounting scandal at Olympus.

They included the camera-maker’s former chairman and executive vice-president, as part of investigations into a decade-long cover-up that has prompted concern over what critics say is lax corporate governance at Japanese companies.

Tsuyoshi Kikukawa, a former chairman and president of Olympus, was arrested in Tokyo along with two other former executives on suspicion of having falsified financial statements, Tokyo prosecutors said. Two former investment bankers suspected of helping to set up the cover-up, and two of their associates, were also arrested.

Olympus said it was aware of the gravity of the situation and was co-operating with the authorities. Experts hired by Olympus to investigate the cover-up has accused the former executives of masking investment losses racked up in Japan’s economy over 13 years.

The irregular accounting came to light in October when Olympus fired Michael C Woodford, who was its president and chief executive. – ( New York Timesservice)