As a result of a company admittance to hiding losses on securities investments for decades, shares in the Japanese technology firm Olympus have fallen by as much as 30% globally.
The company stated that it used funds from past acquisitions to cover the losses and deny their existence.
As a result, executive vice president Hisashi Mori has been fired.
Current president of Olympus, Shuichi Takayama, is placing further blame on former president Ysuyoshi Kikukawa and the company’s auditor, Hideo Yamada.
President Takayama stated that he was completely unaware that the company had been hiding losses, and that the company would consider criminal charges if they are deemed necessary.
The admittance marks the biggest disclosure from Olympus since Michael Woodford, former Olympus chief executive, made a statement claiming he was fired for calling attention to the questionable accounting methods.
Sound the alarm
The controversy was brought to light after Woodford’s allegations last month, though Olympus maintained it had done nothing wrong. The company went so far as to launch a third-party investigation of the allegations to clear its name.
From this investigation, it was learned that Olympus had been deferring posting losses on securities investments since the 1990s.
The scandal pertains to payments from Olympus to financial advisers during past acquisitions of companies such as British firm Gyrus. The company also admits to channelling money from acquisitions through various funds in order to defer posting losses.
Since the scandal first broke in October, Olympus has seen its share values plunge by more than half. Analysts have said that the very future of the company is now being questioned, while former chief executive Woodward says that at least executive and director positions are now “untenable.”
Other experts say that as Olympus has covered its tracks with false entries for 20 years, all people involved for the last 20 years could be held responsible.
Experts say that the company is in grave danger of having its shares delisted as the result of the scandal that has shocked investors.
However, the Tokyo Stock Exchange, where Olympus has its shares listed, said that the public is missing crucial details such as the size of the deferred losses and can therefore not make any decision on the state of Olympus shares.