Shareholders of Olympus voted in a new board today but the firm's British ex-chief executive, whose dismissal six months ago unveiled the biggest scandal in corporate Japan for decades, threatened to have the result annulled.
At the meeting, which some hoped would draw a line under the scandal, Japanese institutions and Olympus' lenders, suppliers and customers approved restated financial accounts and voted in new management nominated by the current, discredited board, all 11 of whom stood down.
Michael Woodford was sacked by Olympus in October after he queried staggeringly high advisory fees paid in past acquisitions, triggering a probe that uncovered a $1.7 billion (€1.31 billion) accounting fraud stretching back over more than a decade. Olympus said then it fired Mr Woodford for "gross misconduct".
Foreign investors, who own 25-30 per cent of the camera maker and the world's biggest manufacturer of endoscopes used for internal medical examinations, had hoped the scandal would shake up a deep-rooted culture of cosy ties between banks and boardrooms.
"Today is the day the new Olympus is supposed to start. It's a mockery. It's why the world looks on and continues to think this world works in a completely different way, it's Alice in Wonderland," Mr Woodford told reporters.
The meeting began promptly at 10am (0100 GMT) with Mr Takayama and the entire board standing before shareholders and bowing deeply in a traditional gesture of public apology.
But, after 90 minutes, Mr Woodford stood and said the board's earlier refusal to answer a written question about the reasons for his dismissal meant shareholders could ask the courts to invalidate the meeting - potentially leaving the company without a new management board.
Olympus senior executive managing officer Masataka Suzuki earlier told the meeting the company could not answer the question about why Mr Woodford was fired as this was part of an ongoing legal case. Mr Woodford is taking legal action against his former employer in Britain, seeking 10 years' salary for wrongful dismissal.
Amid rare raucous scenes at a Japanese corporate event, Mr Woodford slammed the board and criticised it for keeping two of its members - Kazuhiro Watanabe and Shinichi Nishigaki - as senior managers.
"Hundreds of billions of yen of shareholder value have already been lost through this scandal," he said. "Do you not realise how that looks to the world? Today is the new start ... and you have those two gentlemen staying in the company? How dare you, shame on you."
He said that a refusal to answer the question on his sacking was against local law and "such illegal conduct will constitute clear grounds for this EGM to be later cancelled in court."
Shareholders approved Hiroyuki Sasa (56) as the company's new president. Mr Sasa joined Olympus in 1982 and has been head of both development and marketing at the group's medical equipment business, which has around a 70 per cent share of the global market for diagnostic endoscopes. As chairman, they voted in 63-year-old Yasuyuki Kimoto, a former executive at Sumitomo Mitsui Banking Corp, Olympus's main lender and part of Sumitomo Mitsui Financial Group (SMFG).
Leading foreign shareholders had opposed both men, calling instead for fresh, outside talent amid concerns that Olympus' creditors will call the shots in the boardroom.
Since Mr Woodford was fired on October 14th, Olympus has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s. It is under investigation by law enforcement agencies in Japan, Britain and the United States.
Over the months, seven people have been arrested, including former Olympus chairman Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former auditor Hideo Yamada.
High on the new board's to-do list will be whether to seek a cash injection, possibly through a capital tie-up in its medical business. Sony, Panasonic and Fujifilm are among potential partners cited in media reports.
In December, Olympus filed five years' worth of corrected earnings statements to iron out its accounts, showing its net assets had dwindled to 46 billion yen as of end-September. By the year-end, Olympus had an equity ratio of just 4.4 per cent, compared with about 30 per cent for its rivals and less than a quarter of what is seen as a healthy cut-off, implying it needs to raise about 150 billion yen in fresh equity.
Olympus has estimated a 32 billion yen loss for the year just ended, blamed mainly on its camera business and tax asset writedowns - and well below its pre-scandal forecast for an 18 billion yen profit. In the previous year, it posted a 3.9 billion yen net profit.
Reuters
