Japan court to deliver verdict on Olympus executives

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Published July 02, 2013

| AFP

A Japanese court on Wednesday is due to deliver a verdict in the case of three disgraced Olympus executives accused of engineering a massive accounting fraud at the camera and medical equipment maker.

Prosecutors have asked that a five-year jail term be handed to sacked company president Tsuyoshi Kikukawa and lesser sentences for ex-vice president Hisashi Mori and auditor Hideo Yamada.

According to their indictment, the trio were key figures in a complicated fraud to hide about $1.7 billion in losses that involved outsized consulting fees and buying unrelated companies.

The cover-up was later exposed by whistleblowing chief executive Michael Woodford in late 2011, dealing a huge blow to the company and hammering Japan's corporate governance image.

The Tokyo District Court is expected to deliver its ruling around 0430 GMT. An Olympus spokesman declined to comment ahead of the verdict.

The prosecution has also asked the court to slap a one-billion-yen ($10-million) fine on the company itself.

The three men have pleaded guilty to charges they falsified the company's financial results, with Kikukawa in September telling the court he would take "full responsibility" for the crime.

Woodford, a Briton who was the company's first foreign leader, was abruptly sacked in October 2011 after he took his concerns about the firm's accounting to the Olympus board. The company initially denied wrongdoing.

It later admitted to the fraud and sacked Kikukawa and other executives as Japanese, British and US authorities launched probes into the affair, which grabbed global headlines.

Olympus subsequently agreed to a reported 10.0 million pound ($15 million) payout to Woodford to settle a wrongful dismissal lawsuit.

The company has already been fined about 192 million yen by Japan's Financial Services Agency.

Separately, Japanese authorities have ordered Olympus to pay about 5.0 billion yen in back taxes and penalties related to the cover-up, local media have reported.

Indictments have also been filed against three businessman who were arrested last month on suspicion of illegally receiving money from Olympus in return for helping with the cover up.

Nobumasa Yokoo, 59, a corporate executive, and his associates Taku Hada, 50, and Hiroshi Ono, 51, face charges regarding the overseas transfer of 2.2 billion yen received as a reward for instructing company executives how to conceal the losses., Kyodo news agency reported Monday.

Since the scandal broke, Olympus has announced a major corporate overhaul including a deal with Sony that saw the pair establish a medical equipment joint venture.

The business was launched after Sony said it would invest 50 billion yen in Olympus. Although it is better known by the public for its cameras, Olympus controls about 70 percent of the global market for medical endoscopes.

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