Michael Woodford demonstrates oversight by Japan’s regulators
Daylife/Reuters Pictures used by permission

Four months after one of Japan’s biggest corporate scandals, police and prosecutors on have arrested seven men, including the former president of Olympus Corp and ex-bankers, over their role in a $1.7 billion accounting fraud at the medical equipment and camera maker.

Tokyo prosecutors arrested ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said.

Also arrested were former bankers Akio Nakagawa and Nobumasa Yokoo and two others suspected of helping hide huge investment losses through complex M&A deals…

The scandal was exposed in October by then-CEO Michael Woodford, who was sacked by the Olympus board after querying dubious M&A deals later found to have been used to conceal the losses. Woodford campaigned to win his job back, but gave up that bid last month, blaming cozy ties between management and big Japanese shareholders and citing the strain on his family.

“After going to hell and back, this is a day to remember,” Woodford said in an email on Thursday. The Briton, who was a rare foreign CEO in Japan, plans to write a book about his experiences uncovering the scandal…

Olympus in December filed five years’ worth of corrected financial statements plus overdue first-half results…

Looking forward to Woodford’s book. Sometimes global finance produces as much “innovative” writing as global politics.

  1. McCullough says:

    Nice to see Japan has balls, obviously we do not.

    BTW, are Japanese politicians controlled by the bankers like ours are? Does anyone know?

    • orchidcup says:

      Banksters have an interest in controlling anything that influences the economy, so my guess would be yes.

    • msbpodcast says:

      They’re controlled by actual gangsters (the Yakuza) as well as bankers.

      Since Japan is a small country with intense competition for land, they’re still trying to recover from their own real-estate bubble.

  2. msbpodcast says:

    That’s what happens when GAAP (Generally Accepted Accounting Principles,) is actually against the law.

    The accountants at Olympus are GAAP toothed crooks, imbeciles and morons.

    That’s the lack of honesty and moral standing of accountants in general. Its not their fault, they’re just people who would kick their own mothers to the curb if their spreadsheets trended down.

    • Hmeyers2 says:

      That is a bit of an extreme statement.

      Probably 75% of Americans “cheat” on their taxes in some form (like not paying their state sales tax on internet transaction, as one example).

      Large companies are no different.

      It is not that I believe that large corporations should be doing it, more that it is hardly shocking consider that average joes and politicians do it all the time too.

      Oops I lost $1 Billion at IMF global and I still go to dinner with Obama and he gets soft-balled by his Senate buddies and says “Gee … I don’t know where it is”.

      • msbpodcast says:

        Corporations are people, according to Mittens, so corporations should have their licences to do business revoked for a term equivalent to the jail sentence we’d give to the accountants.

        (Watch the corporations throw the fuckin’ accountants under a bus. 🙂 )

  3. Hmeyers2 says:

    Funny how Kodak goes out of business.

    Yet other camera-oriented businesses thrive selling red-light cameras and big brother surveillance cameras.

  4. msbpodcast says:

    I feel some empathy for CEO Michael Woodford.

    I was in MontrĂ©al working in the schmutta business and I’d come up against a $225,000 discrepancy in cost of goods sold (CoGS) and the CIO wouldn’t believe me.

    After writing the CoGS software, running it three times and coming up with the same amount, checking the math, checking my software and coming up with the same numbers, been told that it had to be my software, I just lost it and fuckin’ quit.

    I ran into a chick two weeks later at a party who’s father was a boookie and it turned out that [name withheld] owner a horse farm and had been betting on his own nags and had dropped a quarter of a million to her father.

    • DrWally says:

      I am sure the company auditors would be interested, as well as the outside directors, in hearing what you have to say.

      If it is privately held, well, all bets are off (so to speak).

      • msbpodcast says:

        The statute of limitations has passed already.

        G.A. eventually got his head cracked open by the bookie’s goons because he kept betting on his nags, and they ran like they had three legs.

        The company is long gone, the farm is long gone and the horses got turned into shoes, dog food and glue a long time ago. 🙂

  5. MartinJJ says:

    Now move the focus to Goldman Sachs and the FED and you will see a 16 trillion dollar scandal. They just laugh about a lousy 1.7 billion fraud. That’s peanuts.

  6. Animby says:

    Hey, let them have some fun while they still can. It’s a country about to be subsumed in a radioactive apocalypse that threatens the globe. Life there will soon consist of mutant samurais and weirdly sentient schoolgirl panties. Plumes of cesium-laced sushi eructations will ascend into the stratosphere and spread death and destruction redolent of wasabi over the entire northern hemisphere.

    Sorry. I listened to Jeff Rense yesterday. I’ll be better soon…

  7. Cursor_ says:

    Now if we could bring our criminals to trial as well.

    But we won’t.

    The criminals run the prison.


    • msbpodcast says:

      The criminals own the land that the prison sits on.

      The 99%ers who fill the prisons provide slave labour for the maintenance of the prison. (On top of that those 99%ers still outside the prison pay for the entire apparatus for their construction and their feeding with fresh bodies.)

      Some of that money goes into the pockets of the 1%ers who administer the lease. (The same 1%ers write the laws that make criminals out of the 99%ers, excepting themselves of course.)

      In return for which the 1%ers make the deposits into the bank accounts of the 12,400 criminals and leave them alone to be gentleman farmers on the USDA dime, growing food that the FDA makes sure is going to kill us.

      There’s a reason why Bush didn’t know a damn thing about the scanning IBM cash registers.

      He doesn’t eat crap that comes from there.

      He can afford real food.

  8. deowll says:

    Was this bigger or smaller than the Bernie Madoff case? I forget. Then there was all that money given to green companies by Obama because his fund raisers wanted him to. We aren’t going to get any of that back. Then we did such a good job with the oversight of Freddie Mac and Fanny May.

    In others words the Japanese may be incompetent idiots but then so are we.


Bad Behavior has blocked 19520 access attempts in the last 7 days.