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Olympus shares suffer as former CEO goes on the attack

By dpreview staff on Oct 18, 2011 at 20:44 GMT

Former Olympus CEO Michael Woodford has launched a scathing attack on the company, following his removal from his post. Olympus had said Woodford was removed from his post over a difference in strategic direction between him and the rest of the Board of Directors. In a frank interview with the Financial Times, Woodford calls this 'utter nonsense' and states his belief that his removal relates to an investigation he had commissioned, into unusual payments and his suggestion that the board's Chairman and Vice Chairman should stand down over the issue. In response to suggestions that Olympus may try to prosecute him for disclosing this information, Woodford says: 'Bring it on.'

Olympus' explanation for the dismissal is given below, while the New York Times has published the letter Woodford says led to his removal as CEO. Meanwhile, the Financial Times has released an astonishingly blunt video interview with the former CEO, during which he says he has submitted his report to the UK Serious Fraud Office for investigation.

Shares in the company have fallen more than 30% since Friday, which is unlikely to spell good news for the loss-making camera division that makes up 16% of the company's sales.

Former CEO Michael Woodford and Chairman Tsuyoshi Kikukawa pose for the company's 2011 Annual Report

Press Release:

Olympus Corporation Resolved Dismissal of President Michael C. Woodford

Olympus Corporation (the "Company") would like to provide notification that the Board of Directors resolved at its Board of directors' meeting held today to dismiss the Company president as of today, as outlined below.

1. Reason for the Change

Michael C. Woodford has largely diverted from the rest of the management team in regard to the management direction and method, and it is now causing problems for decision making by the management team.

Hence, judging that realisation of the 2010 Corporate Strategic Plan with its slogan of "Advancing to the Next Stage of Globalisation" would be difficult to achieve by the management team led by Woodford, all the board directors attending today, except for Woodford himself who could not participate in the voting due to special interest, unanimously resolved the dismissal from his office of the representative director, President and Chief Executive Officer (dismissal from the office of the representative director, President and Chief Executive Officer and stays as director without executing right.) Along with this, it was also resolved that the representative director, Chairman Tsuyoshi Kikukawa double as the representative director, President and Chief Executive Officer.

Global management that Olympus aims is to implement management rules, information management and operation that are common throughout the world in order to establish a business infrastructure that is more efficient and quick to respond while making the most of a Japanese style management that sets a high value on people, technology and pride of monozukuri or manufacturing. To this end, all our employees will head for the same direction as we will urgently start establishing a new structure to go towards the same goal with the entire staff as one.

2. Contents of the Change

PositionNamePrevious Position
Representative Director, Chairman, President and Chief Executive Officer Tsuyoshi Kikukawa Representative Director and Chairman
Director Michael C. Woodford Representative Director, President and Chief Executive Officer

Comments

Total comments: 193
12
Sosua
By Sosua (Oct 19, 2011)

Hopefully that $700m was going to a new sensor manufacturer in the Cayman Islands...

9 upvotes
Goodmeme
By Goodmeme (Oct 19, 2011)

Very funny! I bet the board wish that now!

0 upvotes
Optimal Prime
By Optimal Prime (Oct 19, 2011)

Interestingly, unlike last month's news report on Nikon share price rise caused by rumours of a mirrorless system camera, DPR's editorial team didn't see fit to report the dismissal of Olympus CEO and the subsequent scandal involving nearly US$700million paid to an undisclosed party in the Cayman Islands as a News item when the story first broke out last Friday (Oct. 14, 2011), nearly 5 days ago. Nor the fact that Olympus shares have tumbled by close to 50% since the CEO's dismissal.

One could certainly be forgiven for thinking Amazon (DPR parent company) prefers to dispense such damaging bad news as sparingly as possible in the hope of delaying any negative impact on their web-based sales of Olympus branded products...

5 upvotes
Color Blotch
By Color Blotch (Oct 19, 2011)

I think you're not digging deep enough. DPR might even played a part in the whole shady scheme as well. Who knows, they could even been behind that mysterious company at Cayman Islands. DPR have been so late with reviews lately. Could it be they were actually busy packing the $700 millions they got at Caymans and thus couldn't keep up with their schedule? Everything adds up man, we totally cracked this one!

9 upvotes
Fletch50mm
By Fletch50mm (Oct 19, 2011)

Very good Color Blotch. Seriously the ongoing DPR conspiracy theories continue to get even whackier.

1 upvote
Goodmeme
By Goodmeme (Oct 19, 2011)

I think as a news site you have to be careful of defamation with issues like this. Basically you can be sued just for repeating things if they are claimed to be inaccurate and harmful. At this point, it is too big a story to worry about such attacks, although most sites / papers will simply post links to documents etc rather than make comment just in case.

0 upvotes
wetsleet
By wetsleet (Oct 19, 2011)

Who mentioned a lack of reviews on DP(R)? Shush up! It's a news site now, as Goodmeme correctly alludes.

Seriously guys, I know I have mentioned it before and you have replied along the lines of "but you get both, reviews and lots of lovely articles also - be happy". But surely there are a couple of gaps in your lens review database you could plug, at least? Maybe just a small camera or two as well, just until the big stuff comes out.

0 upvotes
OlyAmber
By OlyAmber (Oct 25, 2011)

Phil Askey was on the Glassy Knoll!

0 upvotes
erichK
By erichK (Oct 19, 2011)

Sadly, our world of global corporations with very limited national oversight facilitates the kind of shady transactions that this ex-CEO reports.

There likely was something very questionable going on at Olympus.

But there is also reason to distrust this self-proclaimed corporate crusader. For one thing, according to a former Olympus employee who posts on the OLY dslr forum, W. was a notorious corporate cost-cutting shark. For another, the degree to which he was prepared to retaliate to his firing by the Board he appears to have focussed his energies on toppling belies the apparent assumption of many here that his motives were purely altruistic.

W. may indeed simply have an immense ego and huge personal ambitions. But he could also be acting for other parties for whom a massive decline in the value of Olympus stock and the disgrace of their present Board and management would prove very useful by facilitating the sidelining and/or takeover of a competitor.

Comment edited 2 times, last edit 7 minutes after posting
0 upvotes
Optimal Prime
By Optimal Prime (Oct 19, 2011)

Interesting conspiracy theories. I see a book on Oly coming very soon...

0 upvotes
BioTraveler
By BioTraveler (Oct 19, 2011)

Of course he has an immense ego and huge personal ambitions. Very few could get close to the position he held with out those attributes. (I'm not saying they are good attributes, just saying..) My big hesitation is that he reported it to the authorites. He would have to be pretty sure they could prove it to come out in public and say he reported them. If he just reports them and there is an investigation, it would drop stock prices. By stating publicly he reported them, his ass is on the line. He now has to back his claims up, and he has to know that. Smart is another attribute he has to have to get where he was.

0 upvotes
Debankur Mukherjee
By Debankur Mukherjee (Oct 19, 2011)

OK Oly bring out some FF / APS cameras and your problem will get solved automatically !! 8-))

1 upvote
CameraLabTester
By CameraLabTester (Oct 19, 2011)

Lesson:
Never hire a moral crusader CEO when you know you got lots of bunnies swept under the rug...

7 upvotes
JojieRT
By JojieRT (Oct 19, 2011)

i don't think morality was behind his decision. the letter i saw mentioned his fiduciary obligation. way different beasts :-)

3 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

So is it better to hire a crook with a share of the bunnies to hide? Most boards are selected to behave like bunnies: they wiggle noses, and appear to have big ears, but are mostly fluff.

1 upvote
CameraLabTester
By CameraLabTester (Oct 19, 2011)

Too bad.
Just when at a time I was warming up to it's 4/3 foray, which I consider a wise choice.
Shares falling 30% since Friday? Is this for real? That's like a car tethering on the edge of the Grand Canyon!

1 upvote
Klarno
By Klarno (Oct 19, 2011)

It's worse than that. From their high on Oct 14 of ¥2,483, they closed today at ¥1,372. That's a 45% drop.

2 upvotes
JojieRT
By JojieRT (Oct 19, 2011)

time to buy then :-)

0 upvotes
Najinsky
By Najinsky (Oct 19, 2011)

"Time to buy"? Not yet. Never catch a falling knife.

2 upvotes
Ikeepem
By Ikeepem (Oct 19, 2011)

"time to buy then"...You go first, I'll wait till they make up the 700 Million in profit and see where they go from there..ya think their camera division can contribute??..lol

0 upvotes
JojieRT
By JojieRT (Oct 20, 2011)

why must they make up the 700M in profit?

0 upvotes
GodSpeaks
By GodSpeaks (Oct 19, 2011)

If the amount paid was so above board, then the board of directors could have easily answered Woodford's concerns. That their reaction was to fired him immediately and without any sort of discussion with him speaks volumns about Woodford's allegations of impropriety.

As for why it is now so public... obviously a gross misjudgement by the Japanese Board of Directors.

Comment edited 40 seconds after posting
9 upvotes
LJohnK2
By LJohnK2 (Oct 19, 2011)

There are three distinct stories here:
1)Tsuyoshi Kikukawa's less than convincing proclamations
2) Michael C. Woodford's
3) The Truth

All are different....but KPMG and Pricewaterhouse Coopers don't issue the kind of statements associated with this mess where there is no fire

I think 2) is likely closest to 3) but what we will likely never know is the true reason this has played out so publicly.

While some have claimed that Michael C. Woodford's is merely a disgruntled ex employee....Olympus top management is obviously in a glass house.....they really should have bought the stones, they didn't so now they can fix the broken glass.

1 upvote
Cy Cheze
By Cy Cheze (Oct 19, 2011)

"Disgruntled" = unbelievable? How would one describe an employee who, seeing $687m disappear, does not become disgruntled?

It could be, though, that Kikukawa has assurances from counsel that he and his breatheren are immune from prosecution. Perhaps they have a vault full of documents signed by subordinates that sanctify all the deals they approved, "unaware of petty details." Some mid-level "salaryman" will get the budgeon and all will be well. Eh?

2 upvotes
Russ Houston
By Russ Houston (Oct 19, 2011)

Fascinating stuff. I hope this guy doesn't have an "accident" in the near future. That's an awful lot of money to just disappear, and I'm sure whoever has it doesn't want it found.

Comment edited 14 minutes after posting
0 upvotes
MichaelKJ
By MichaelKJ (Oct 19, 2011)

Quotes from the latest NYTimes article:

"Responding for the first time to accusations of fraud, the Olympus Corporation said that acquisition fees paid to unidentified advisers amounting to 30 billion yen ($391 million) were not excessive and followed “appropriate” accounting procedures"

“Investors expected that management would deny everything but in fact the chairman started to admit things,” Yuuki Sakurai, president at Fukoku Capital Management, said in a phone interview. “Only the numbers are different. They admitted the payment even though several years ago they didn’t disclose it. It makes you wonder if there’s more out there.”

"Potential offenses by Olympus include false accounting and breaches of duties by the board, according to the Oct. 11 report by PricewaterhouseCoopers that Mr. Woodford provided to Bloomberg News."

2 upvotes
RestyF
By RestyF (Oct 19, 2011)

I'm just wondering if this kind of corporate mess has something to do with this site as a camera review and information site. This is Olympus as a whole and camera division is just a part of Olympus corporation. If Sony, Nikon and Canon has some corporate problems, how far will DPReview dig into it? Most of the corporations have their own corporate problems, will DPReview care to write articles on those problems?

2 upvotes
CarlPH
By CarlPH (Oct 19, 2011)

This information belongs here. Please don't downplay it like it was just another corporate problem.

4 upvotes
stuntmonkey
By stuntmonkey (Oct 19, 2011)

No, it's a valid point. The Gyrus ACMI acquisition has to do with Olympus' medical division. It's newsworthy, but is it newsworthy for consumer cameras?

2 upvotes
RestyF
By RestyF (Oct 19, 2011)

@CarlPH, I'm not downplaying the issue, my point is that this site focuses on photography reviews and information as the banner itself says "Digital Photography Reviews". While they can add up relevant news about photography, this kind of articles for me is in the wrong track as what the site's vision is trying to go.

1 upvote
CarlPH
By CarlPH (Oct 19, 2011)

@RestyF If it did not work for you well, I can't argue with that :)

Comment edited 2 times, last edit 27 seconds after posting
0 upvotes
cxsparc
By cxsparc (Oct 19, 2011)

I find it appropriate to report such news here, because it reflects on the capabilities of the company and their future. I'd probably still buy a compact camera from Oly, but would hesitate from buying into their 43 system when it is unclear whether their camera division will become a "collateral damage" of their corruption at top level.
In such a case, you would end up with a dead-end system.

2 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

The Olympus corporate event is relevant to camera users because: 1) it will disrupt the company as a whole, exposing it to liquidation or takeover; and 2) since the camera division is unprofitable, it can hardly weather the turmoil serenely. Might the future be like the recent histories of Minolta or Pentax?

0 upvotes
Mark Chan
By Mark Chan (Oct 19, 2011)

read 'leaked letter' found in olympus slr forums and judge for yourself if this is a disgruntled person

0 upvotes
whtchocla7e
By whtchocla7e (Oct 18, 2011)

Disgruntled employee.

1 upvote
MichaelKJ
By MichaelKJ (Oct 19, 2011)

A justifiably disgruntled employee.

3 upvotes
whtchocla7e
By whtchocla7e (Oct 19, 2011)

That we will find out after an official court ruling.

0 upvotes
Jim Scarff
By Jim Scarff (Oct 19, 2011)

Read the letter about how the Chairman (not the fired CEO) apears to have been a party to a $1 billion embezzlement at Olympus.

5 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

The judge may rule any evidence submitted by a "disgruntled employee" to be inadmissible, or consider it to be outweighted by the cheerful bleeting of woolly fanboys eager to be fleeced.

1 upvote
Zvonimir Tosic
By Zvonimir Tosic (Oct 18, 2011)

The inability of the board of directors has nothing to do with hard work and brilliance of engineers and product designers of Olympus. I'd love crazy stock market world to focus once on real values and assets of the companies, not on tabloid-style stories which are instantly made into quick profit or loss opportunities.
But if that were true, and people would focus on where real value is and not where speculative value is, we would't have financial crises ever.

Comment edited 2 minutes after posting
3 upvotes
Optimal Prime
By Optimal Prime (Oct 19, 2011)

I agree with your first sentence. However, there is nothing tabloid-styled about a story involving nearly US$700million paid to an undisclosed entity in the Cayman Islands that dissolved without a trace 2 weeks after receiving it. Think of all the R & D this money could have bought those brilliant engineers...

11 upvotes
MichaelKJ
By MichaelKJ (Oct 19, 2011)

If top management gave away $700 million of the company's assets then the it effectively destroyed $700 million worth of what was created from the hard work and brilliance of the Oly engineers and product designers. Why should the stock market ignore something like this?

6 upvotes
JojieRT
By JojieRT (Oct 19, 2011)

@optimal prime: it is so hard anymore to distinguish tabloid journalism with mainstream journalism. this is a confidential memo after all and in my mind, the publisher should have dug deeper and tried to get answers first before publishing the raw memo. just because something is undisclosed does not mean it's bad? maybe it sells more hits when something remains undisclosed when published instead of waiting to ascertain who the recipient is?

Comment edited 3 minutes after posting
0 upvotes
Carol Stee
By Carol Stee (Oct 19, 2011)

$700 million was diverted to the Cayman Islands that could have been used for R&D. That explains why all Olympus PEN and DSLR bodies use the same aging three year old sensor, and except for a faster auto focus on the third generation bodies the updates in their models have been cosmetic.

2 upvotes
Serhan Oksay
By Serhan Oksay (Oct 18, 2011)

"Combined with Friday's 18 percent fall (alltogether 24 %) the plunge has wiped out $3.2 billion in market value from the Japanese precision instrument and camera maker." This incredible amount: "$3.2 billion" indicates that there is stg fishy going on... The allegations are serious .. why is the well earned money is not going to R&D for better cameras but to overseas cosmetic companies? Is Olympus investing on non-shiny creams for better photos?

1 upvote
jkrumm
By jkrumm (Oct 18, 2011)

We still are far from knowing the full story. Give it a few weeks. My guess is that the answers to "why" they made these payments are not nearly as scary or dramatic as people are assuming, but it's hard to say. It could be a case of basic graft, basic incompetency, or something completely different. It could take months of investigative reporting to uncover the true story, and we don't have very many actual investigative reporters around these days, just people exchanging the same memos and articles over and over again.

Comment edited 4 minutes after posting
0 upvotes
Andrew Booth
By Andrew Booth (Oct 19, 2011)

It's unlikely to be innocent.

Michael Woodford based his actions on the findings of a team of forensic accountants from PWC, who he hired to get to the bottom of this. The investigation has happened and these are the results.

Please read the article and watch the video.

2 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

Camera people show a surprising amount of "defocus" the instant money and accounts become the topic. They show a preference for NR they'd never tolerate in high ISO photos.

1 upvote
Julio
By Julio (Oct 18, 2011)

What an intimate and rare view into the shennanigans in a corporate boardroom. That letter is priceless. We already knew about the totally amoral and criminal behavior of financial parasites such as Goldman Sachs. But we were willing to cut manufacturing corporations a break because they at least produce goods. Apparently the infestation runs much deeper than what those "radicals" occupying Wall St. have been saying.

2 upvotes
danaceb
By danaceb (Oct 18, 2011)

doesn't it seem kinda counterintuitive for the radicals of wall street to limit the scope of corruption? My impression is they were going after all parasitic executives everywhere, otherwise they wouldn't have branched out beyond wall street.

Still, what Olympus has been doing is the same bull thats hit many Japanese companies in the last 20 years. In japan this kind of shenanigans are usually met with a sigh of normalcy. People don't want to play fair and overreact when they get called out on it, and when they finally get caught its time to bow and say sorry before the press.

0 upvotes
Julio
By Julio (Oct 18, 2011)

@ danaceb: I was trying my best to be temperate by throwing a bone to the parasites who oversee the making of things.. thanks for calling me on my insincerity: yeah they're all the same. :)

0 upvotes
SF Photo Gal
By SF Photo Gal (Oct 18, 2011)

The man has been with Olympus for something like 30 years and has just been named CEO. Why would he sabotage his own success? Is his goal was "line his pockets," he'd certainly do better keeping his mouth shut and play along.

6 upvotes
Optimal Prime
By Optimal Prime (Oct 19, 2011)

Your neck is always more important than your job. Basic survival instinct.

0 upvotes
taintedcamera
By taintedcamera (Oct 18, 2011)

Michael C. Woodford is a Corporate Shark... nothing less. He stands brave in Britain, but let him go back to Japan to spout his rhetoric, and face indictment.

Japan has just as fair of a judicial system... Maybe more so!

He's looking to line his pockets, one way or another.

Comment edited 32 seconds after posting
1 upvote
danaceb
By danaceb (Oct 18, 2011)

How pathetic, you must be one heck of a shill to completely ignore Japanese history of rampant white collar crime. As others have blatantly pointed out this man stood to gain nothing and lost his post over being honest.

14 upvotes
MichaelKJ
By MichaelKJ (Oct 19, 2011)

If he is nothing more than a "corporate shark" why did he bother to rock the boat? He was well paid and just two weeks ago was made CEO and was praised by Oly's Board. I've never heard of a CEO who hadn't been granted stock in his/her company, so I assume the decline in Oly's stock has affected him too (unless he sold everything immediately after he was fired). He could have kept quiet and continued to live the good life. Now he the center of controversy, threatened with a lawsuit and unemployed. If you think he is looking to "line his pockets" please indicate how and why you think this will make him better off than he was before.

Comment edited 3 minutes after posting
4 upvotes
Dave Oddie
By Dave Oddie (Oct 19, 2011)

He stands brave in Britain as you put it because the alleged irregularities he reported to the UK Serious Fraud Office allegedly occurred in territory under their jurisdiction. So they can investigate.

2 upvotes
Optimal Prime
By Optimal Prime (Oct 19, 2011)

Does such a non-sensical comment really merit any response? Taintedcamera has indeed a very obstructed view of life.

2 upvotes
LeKiM_NiKoN
By LeKiM_NiKoN (Oct 18, 2011)

I think the term is zaibatsu...

0 upvotes
jl_smith
By jl_smith (Oct 18, 2011)

Typical corporate corruption at the top (I'm conservative pro-capitalism, but anti-corruption!). Even if the CEO stressed he had no evidence top Olympus officials had received payments, you KNOW that's what's going on...c'mon people. Company pays lots of money for "consulting", which makes its way back to them somehow or another.

As a matter of fact, there is a similar aspect of Japanese business used by the automotive industry - Auto top brass will purchase parts from their own seperately-held parts companies, thereby reducing competition. It's got a name, but I can't remember what it is.

Of course, he starts his questioning, spooks the people involved, and of course they "vote out the Brit" to continue their corruption.

By him outing specific people, it may have been seen as very embarrassing by the presumably mainly-Japanese board members, so the unanimous votes to kick him out aren't surprising.

Comment edited 59 seconds after posting
3 upvotes
JojieRT
By JojieRT (Oct 18, 2011)

what is wrong again with a company buying stuff from a related company?

0 upvotes
siggo
By siggo (Oct 19, 2011)

Set up a subsiduary company in another country then charge it huge prices for your components..offshore company profit down and tax there reduced...profits transferred back to parent company...it is called transfer pricing I think. Not sure if this is what you meant.

0 upvotes
JojieRT
By JojieRT (Oct 19, 2011)

the tax code usually takes care of transfer pricing to make sure the prices charged are arms-length. conducting business with a related company is not anti-competitive as jl_smith alludes to.

0 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

To steer business towards a company which the employee owns, or which pays him a kickback, is known as self-dealing or conflict of interest. Unless duly approved by the board and compliant with the corporate by-laws, it constitutes grounds for termination. If approved but tainted by favoritism or uncommon cost to the company, it is "bad governance" and symptomatic of a company headed towards ruin. To hide the transactions through front companies is called money laundering, which is a criminal offense in Japan and elsewhere.

0 upvotes
JojieRT
By JojieRT (Oct 20, 2011)

your last sentence reminds me of the thing colbert is doing to poke fun at the FEC regulations. it's quite perfectly legal i guess for a 501(c) company to take contributions & not disclose & then turn around and give it to a PAC. that seem to fit your description of what money laundering is, haha.

0 upvotes
ivo kwee
By ivo kwee (Oct 18, 2011)

Way to go Woodford!!! "OccupyOlympus"! free the world from these corrupt management.

0 upvotes
dave gaines
By dave gaines (Oct 18, 2011)

This news is affecting their stock value. It has nothing to do with the great value of their cameras and lenses. Olympus will continue to produce the most popular mirror-less ILC and the versatile 4/3 format DSLR's that make fine photography with excellent optics affordable.
The Wall Street Journal had an article on Monday describing the conflict. He was fired by a stacked board. Is this SOP for Japanese companies?
So on being fired he went public with the damaging info. Once its revealed and verified he'll have reason to sue for wrongful termination. And why not, they sacraficed his career to protect corporate corruption.
The Journal can't come right out and say Olympus exec's are corrupt but it's pretty clear if you read the facts and put 2 and 2 together. This kind of corporate greed and corruption is common throughout the world. European and US corporations are no exception. This story may explain why Olympus doesn't spend more money on R&R.

1 upvote
eddie_cam
By eddie_cam (Oct 18, 2011)

Looks like Olympus doesn't like new sensors (i.e. people sensing something fishy) ...

1 upvote
Graystar
By Graystar (Oct 18, 2011)

It says "there have been 8 new massages posted. Reload" but after reloading I don't see any massage videos...where are the videos??

In any case, I don't think it would be any great loss if Olympus stop producing cameras. Certainly not like when Coolbrands stopped producing Godiva Milk Chocolate ice cream...now THAT was a serious loss for humanity!

1 upvote
Alberto Tanikawa
By Alberto Tanikawa (Oct 18, 2011)

Massage videos? Where? :p But I would miss Olympus, even though being a Nikonian now, if it went under.

0 upvotes
Tim in upstate NY
By Tim in upstate NY (Oct 18, 2011)

I'm thinking that Olympus Imaging will survive this crisis no matter what the outcome of this dispute. I'm just worried that it might get swallowed up by another camera company the way that Minolta was by Sony. It would actually be better for us Olympus users if Olympus Imaging was bought by a non-photography-centric company like Apple for example. That way, there'd be no compulsion by the new owners to cherry pick what assets they find useful and then discard everything else including the unique traits of Olympus cameras and optics which are so much appreciated by those of us who love our Olympus equipment. And I'm not necessarily suggesting Apple as a buyer as there are likely other companies that could possibly be interested in getting into the photography business.

1 upvote
xMichaelx
By xMichaelx (Oct 18, 2011)

Apple needs an optics partner, but they'd have nothing to gain from acquiring Olympus. Oly doesn't make sensors, and m4/3 isn't the type of thing Apple has any use for. They're just as likely to go into the standalone GPS market (and that would never happen either).

On the other hand, HP, Samsung, and Kodak could profit from an Oly acquisition. They could pick up (mirrorless!) camera marketshare while decreasing the competition.

1 upvote
lightsculpture
By lightsculpture (Oct 19, 2011)

Apple will likely only acquire companies that helps in their supply chain or components for the current products. I don't see them venturing into the camera business. If they did, they would build their own iSLR or something...

Kodak is fighting for their own life so we can pretty much write them off. Samsung is an APS-C company, so they may not see value in Oly's m43 technologies. HP, well they've got their own CEO mess to clean up.

I think if Oly were to be acquired, IMO a likely buyer could be Panasonic. They can they consolidate the m43 lenses, camera technology and market share.

0 upvotes
Cy Cheze
By Cy Cheze (Oct 19, 2011)

Panasonic bought Sanyo and...

Samsung is Korean. Even if it did not rebrand Olympus at once, can you imagine Japanese continuing to buy from a Korean-owned company? Anyway, why would Samsung pay for a company whose products it has already cloned?

Poor Kodak. It can't afford to buy anything right now. A buyer could snatch up Kodak and Olympus Camera for a song right now.

0 upvotes
bobby335i
By bobby335i (Oct 18, 2011)

i thought that olympus was doing quite well regarding the PEN series...

0 upvotes
Ashley Pomeroy
By Ashley Pomeroy (Oct 18, 2011)

Somewhere up there Yoshihisa Maitani is shaking his head and tutting.

0 upvotes
photocine
By photocine (Oct 18, 2011)

Well the upshot (or downshot) to this whole saga is that in the future, Japanese companies will think twice before bringing in "outsiders" to lead the company.

0 upvotes
sunhorse
By sunhorse (Oct 19, 2011)

So now a company veteran of 30 years is an "outsider"? I think you are referring to the fact that Woodford is a gaijin. I'm sure that the Olympus board are kicking themselves and blaming the gaijin right now. How dare Woodford expect good governance from the board? Scandalous!

1 upvote
007peter
By 007peter (Oct 19, 2011)

Unlike US and UK, Japanese board members consist entirely of private insiders rather than expert from outside the company. As the result, most of them are just YES-MAN and never dare challenge the decision made by the chairman.
I'm glad Woodford has gotten the proof, last reported that he handed them to both US and UK security exchange. The accounting fraud alone can result in rather severe fine against Olympus, Inc. The fact that money is wired in Cayman also scream Tax Evasion. Either way, this scandal is only growing larger by the hour.

0 upvotes
Alberto Tanikawa
By Alberto Tanikawa (Oct 18, 2011)

It's sad to see Olympus going down this way :(

0 upvotes
SDF
By SDF (Oct 18, 2011)

Sounds like a tax evasion. Someone please buy Olympus. Samsung?

0 upvotes
SHood
By SHood (Oct 18, 2011)

Here is the letter from then President & CEO, Woodford to the Chairmain just 3 days before he was sacked.

http://graphics8.nytimes.com/packages/pdf/business/20111018/letter-text.pdf

"In putting the company first, the honourable way forward would be for you and Mori-san to face the consequences of what has taken place, which is a shameful saga by any stretch of the imagination. It is clear that the current situation is now untenable and to move forward positively the necessary course of action is for you both to tender your resignations from the Board. This approach would allow the situation to be managed in a discreet manner and minimise the reputational damage to both Olympus and yourselves. If your resignations are not forthcoming, then there is a principal obligation upon me in respecting my fiduciary duties, to raise, with the appropriate parties, my fundamental concerns in relation to the governance of the company."

0 upvotes
Richard Butler
By Richard Butler (Oct 18, 2011)

That letter is linked to in the story.

0 upvotes
Marc T
By Marc T (Oct 18, 2011)

Too bad. They had some interesting ideas but didn't make the grade.

Comment edited 2 times, last edit 8 minutes after posting
1 upvote
IcyVeins
By IcyVeins (Oct 18, 2011)

"Bring it on."

SO FULL OF WIN! Olympus is a joke and I hope they get bought out by Apple or something.

0 upvotes
xMichaelx
By xMichaelx (Oct 18, 2011)

In your fantasy world, what could Apple possibly gain by buying Olympus?

3 upvotes
IcyVeins
By IcyVeins (Oct 19, 2011)

Um, maybe they want to enter the digital camera industry and Olympus gives them a fully developed line of cameras and lenses so they don't have to spend time and money starting from scratch?

0 upvotes
Mssimo
By Mssimo (Oct 18, 2011)

I hope Panasonic or richo (aka pentax) buys off Olympus camera/health division.

2 upvotes
007peter
By 007peter (Oct 19, 2011)

Actually, CANON is be a much better fit:
- Canon has no mirror-less in its lineup
- Canon is very late to get into the mirror-less game
- even if canon get into mirror-less in 2012, canon will not become a dominate player in the mirror-less arena overnight.
- existing canon lens are PDAF optimized, and is not suitable for CDAF mirror-less
- canon will need to create a new line of CDAF lens anyways.

The easiest way to become a dominated player in the mirror-less is just buying out Olympus image division out right. Canon saved on the R&D it take to create an entire new lines of CDAF lens and camera bodies. Canon-Olympus would become a great marriage.

Olympus in turn, can finally dump that ancient Panasonic 12mp mos sensor for canon 18mp CMOS sensor. With the financial backing and the vast network of canon's distribution, canon-olympus mirror-less would be peerless overnight.

0 upvotes
stuntmonkey
By stuntmonkey (Oct 19, 2011)

Pentax is an also-ran in the medical field. Olympus is a medical heavyweight. Isn't anybody noticing that this has to do with their /medical/ business, not their consumer business?

Comment edited 1 minute after posting
0 upvotes
Dennis  Barak
By Dennis Barak (Oct 19, 2011)

I do not know anything about Olympus
I'm a US accountant and we advise clients all the time on transferring assets for tax and other purposes, even between States, as to optimize tax situations. This could be a perfectly legit transaction. Don't jump to any conclusions. yet

1 upvote
lightsculpture
By lightsculpture (Oct 19, 2011)

I am pretty sure it is Legit. It passed all the major audits, did it not? Spending $1billion on a lousy acquisition or investment is legit...

Whether the investors see that as a sound management decision and would continue to have the confidence in putting their money with Olympus is a separate matter. Like it or not, to a public company, this is more important than anything else. Judging from the stock market reaction to the news.... I do not believe Olympus or its management can escape this one unscathed.

Besides, this does not look like a simple accounting and asset transfer, we are looking at an acquisition of a cosmetic company, hyperinflated consulting fees, etc. All of which will not go down very well with investors.

0 upvotes
Lyle Aldridge
By Lyle Aldridge (Oct 19, 2011)

How many here have actually confirmed what the deposed CEO has written as fact? I haven't, and I don't know how much is true and how much is hooey. But law is my day job, and for the past two decades, the number one bit of advice given to anyone who sees a termination coming and seeks legal advice is, "Report something improper, anything, and don't worry about how much true." Studies of this phenomenon (and I admit, I don't know all their methodology) have suggested that over 90% of corporate "whistle-blowing" is false, either in fact or innuendo (i.e., true facts presented in false light that makes actions appear improper when they're not). The same is true of media reports by today's "journalists," and only slightly less often. Anyone who thinks right and wrong in this dispute can be determined from what see here is just being foolish.

0 upvotes
Pork Slinger
By Pork Slinger (Oct 24, 2011)

http://dealbook.nytimes.com/2011/10/23/2-japanese-bankers-at-heart-of-olympus-fee-inquiry/
Customary fees are 1%. In this case 30% was paid to companies that promptly closed up shop. Two of the big accounting firms have called the deal in to question and the FBI is investigating. Whoops!

0 upvotes
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