Previous news story    Next news story

Tokyo Stock Exchange places Olympus shares 'under supervision'

By dpreview staff on Nov 10, 2011 at 11:54 GMT

Olympus's woes have deepened after the Tokyo Stock Exchange placed its shares 'under supervision' and warned of possible delisting. The news follows the admission thatsenior executives colluded for decades to hide investment losses from the market, and a subsequent statement from Olympus that it would not be able to submit its quarterly earnings report on schedule. The TSE has warned that the company will be delisted if the report is not submitted by 14th December, prompting a further fall in its shares which have now lost almost two-thirds of their value over the past month.

Comments

Total comments: 57
aja2
By aja2 (Nov 15, 2011)

I seriously hope lots of people panic & sell their OLY gear cheaply. I could really use a 12-60mm, 50-200, an E-5...

0 upvotes
MtOlympus
By MtOlympus (Nov 14, 2011)

Now I know how how the investors and employees of Enron felt. My wife and I have 4 Olympus cameras, two flashes, and a half a dozen lenses all made by Olympus. Obviously we like the products and hope that the company survives in some form.

0 upvotes
CameraLabTester
By CameraLabTester (Nov 13, 2011)

It was an excellent optical and camera company.

Too bad it was run by...___________________

(add your own expletive)

0 upvotes
Plakanina
By Plakanina (Nov 11, 2011)

if Olympus is/was so successful with it's medical and camera divisions like everyone thinks why did they have to hide their losses? it seems they were not making a profit at all !!!

0 upvotes
Rolo King
By Rolo King (Nov 11, 2011)

The losses weren't in these two businesses.

http://www.nytimes.com/2011/11/08/business/olympus-hid-investing-losses-in-big-merger-payouts.html?_r=4&hp

0 upvotes
Terrance13
By Terrance13 (Nov 13, 2011)

Yes, but isn't that like a gambler who says, "I did really well at Blackjack, won $2000. Let's ignore the fact that I bet my house and lost it at the roulette table. Overall, I won most of the time."

0 upvotes
Rolo King
By Rolo King (Nov 11, 2011)

I know this case is about fraud but it just reminds me that private companies have it much easier than ones that go public. Somehow, it feels wrong for a company to go down so easily on the whim of investors when its camera sales have gone up in recent years and its medical division isn't doing worse. Maybe it's me and my old-fashioned view on what a company can actually produce and sell.

1 upvote
dark goob
By dark goob (Nov 11, 2011)

Dum dum dummmmm!!
<sinister chipmunk>

0 upvotes
dark goob
By dark goob (Nov 11, 2011)

Apple should buy them!!!

5 upvotes
DanCart
By DanCart (Nov 11, 2011)

on paper it seems like a good idea but I would hate to think what their cameras would be callled?

iPEN..........LOL

0 upvotes
yabokkie
By yabokkie (Nov 13, 2011)

I don't mind the name, even it's called iPus, but Apple didn't buy a handset company and beat them all.

0 upvotes
Bob from Plymouth
By Bob from Plymouth (Nov 11, 2011)

The BBC report says there's a call for Michael Woodford, the sacked chief exec' who questioned unusually the large sums paid out, to be reinstated. Looks like he has a good case for substantial damages but there would be no point if the company goes bust in the process.

I think it's all going to end up in court one way or another. Such a shame that a great company should end up in this mess, I do hope Olympus is not lost.

0 upvotes
yabokkie
By yabokkie (Nov 13, 2011)

http://www.olympusgrassroots.com/

0 upvotes
mike kobal
By mike kobal (Nov 11, 2011)

Harakiri time

0 upvotes
tobias2003
By tobias2003 (Nov 10, 2011)

Sony bought the Konica-Minolta camera business. Maybe some other electronics company that doesn't have cameras yet can buy Olympus, and hopefully keep the brand name. Or the camera business could be spun off and bought by some investor or fund.

0 upvotes
slaybells
By slaybells (Nov 11, 2011)

Why keep brand name? It has been sullied by the actions of the board. They are damned either way: either they knew about it over all those years, in which case, get rid of them, or they didn't know about it over all those years, which makes them a highly ineffective board, so get rid of them. In the grand scheme of things, the brand name is not important, just the talented engineers pushing out the great solutions. Keep the talent with another firm by all means...

0 upvotes
George Hsia
By George Hsia (Nov 11, 2011)

I agree. I think Canon should buy them.

a) They can afford it
b) Canon has nothing in that space

At first I wanted Panasonic to buy them but then realized that it would not add anything to the m43 system but a new player would change the game.

I think the other player that would be interesting would be Fujitsu. Together they can own the market and dominate over Sony and Nikon.

0 upvotes
Terrance13
By Terrance13 (Nov 13, 2011)

Excuse me, but the whole Four-Thirds sensor line is not worth buying. Olympus made a fatal mistake -- the classic semiconductor industry fatal mistake -- of assuming that silicon will always stay expensive. Everybody who ever assumed that died. Remember Moore's Law. Well Olympus ignored that and got married to the smallest, noisiest sensor in the industry, one that blows highlights all of the time. There is nothing there worth buying. There is no profit in buying someone else's mistakes.

The only part of the company that is really good is Zuiko lenses. Sell them to somebody who will make better use of the manufacturing capacity, and trash-can the rest.

0 upvotes
yabokkie
By yabokkie (Nov 13, 2011)

Olympus only learned to make mordern lenses recently from 12-60 (2007) I think, when they started, as the last one?, to copy Canon.

0 upvotes
wdw3
By wdw3 (Nov 10, 2011)

I bet the most likely buyer for Olympus will be a company in China/Taiwan. Lots of photo equipment is already being made in Chinese factories for big name Japanese optical/camera firms. It would be a logical next step for a large Chinese firm to acquire a well known top shelf Japanese brand, like Lenovo buying IBM's computer line.. The Japanese might not like it, but the situation is dire.

1 upvote
PaulSnowcat
By PaulSnowcat (Nov 10, 2011)

Hmmm maybe, after all, Olympus will stop doing nonsence with his own systems...

0 upvotes
jameshamm
By jameshamm (Nov 10, 2011)

"..fall in its shares which have now lost almost two-thirds of their value over the past month.."

Not 4/3rd I'm afraid.

4 upvotes
Carol Stee
By Carol Stee (Nov 10, 2011)

The New York Times reports that Olympus has now lost 3/4 of its value, which means Olympus is close to insolvency. The photographic division will likely go belly up unless another company buys it.

http://www.nytimes.com/2011/11/10/business/global/corporate-japan-rocked-by-scandal-at-olympus.html?nl=todaysheadlines&emc=tha26

0 upvotes
JojieRT
By JojieRT (Nov 11, 2011)

I guess they're not as corrupt as the US. They actually involved law enforcement. Who went to jail over the derivatives mess in the US? What am I thinking, they all got bonuses instead no?

1 upvote
LucasO
By LucasO (Nov 12, 2011)

This is silly. The stock price doesn't relate to solvency directly. If I'm making a billion dollars a year and my stock price drops from $5 to $1, you bet I'm still solvent. There is also no implication that bankruptcy is imminent.
So far there are just reporting issues made public as it appears that losses should have been claimed in 2000, but were stretched out over years and hidden in M&A transactions. There is a loss of confidence in their being honest with the markets. There is not yet a sign that the business is actually operating at a loss. It will be a shame if this mess drives away their top talent. The cameras and innovation driven by this little company has made the entire industry stronger.

0 upvotes
OnTheWeb
By OnTheWeb (Nov 10, 2011)

Maybe Kodak will buy them ;)

0 upvotes
MaikeruN
By MaikeruN (Nov 11, 2011)

kodak has no money lol

0 upvotes
yabokkie
By yabokkie (Nov 13, 2011)

Kodak is selling its own arms and legs.

0 upvotes
Potemkin_Photo
By Potemkin_Photo (Nov 10, 2011)

Japanese companies are no different from any other company in the world. 90% of them most likely commit some kind of fraud. The regulators are probably wary about confronting all this fraud at this time given the state of the world economy. Sure, you could clean everyone up, but then everybody would be broke. Just dirty business as usual. I don't care what happens to Oly since I shoot Canon. But if Oly prices were to go to 50%, I'd be happy to snap up a couple cams from them.

3 upvotes
JojieRT
By JojieRT (Nov 11, 2011)

Ahh, the too big to fail mentality rears its ugly head again.

1 upvote
goetz48
By goetz48 (Nov 10, 2011)

Also troubles with Oly Europe in Hamburg
Michael Woodford shall have gone to police because three managers of Oly Europe are assumed to have made frauds and signed 'blind' invoices.
http://orf.at/stories/2088754/2088796/

0 upvotes
shaocaholica
By shaocaholica (Nov 10, 2011)

How many hardline Oly loyalists will abandon ship if they bring back Woodford to 'clean house'?

0 upvotes
Calroadbiker
By Calroadbiker (Nov 10, 2011)

Hey, its all ok... I've got my C8080 and I'm happy with it.

1 upvote
QuarterToDoom
By QuarterToDoom (Nov 10, 2011)

My E1 is still kicking a.ss

1 upvote
Mike Ronesia
By Mike Ronesia (Nov 10, 2011)

Loved my 8080, but it died from old age.

0 upvotes
JeaPS
By JeaPS (Nov 11, 2011)

My E-1 and C-7070 doing just fine!

0 upvotes
JSK_HP
By JSK_HP (Nov 10, 2011)

Semi-serious prediction: Olympus gets split up; photographic products operation is bought by Panasonic; medical products operation bought by, oh, who knows, maybe Medtronic? More serious question: how many other Japanese companies have been running the same con game Olympus has been running, but without the benefit of a non-brainwashed exec to blow the whistle?

0 upvotes
photophile
By photophile (Nov 10, 2011)

We can only speculate. Many are global household names - Sony, Toyota, Toshiba, Suzuki, Canon, Nikon etc.

0 upvotes
yukonchris
By yukonchris (Nov 10, 2011)

Well, that would be the multi-billion dollar question.

I hope Olympus survives this if only because I like their product, and loosing such an important player will further erode an already diminished field of camera makers.

Of course, one can't help but wonder, as you say, how many others are playing the same game. Olympus may simply be the tip of a very unstable iceberg, and sawing off the tip may expose bigger trouble lying just under the surface.

2 upvotes
Cy Cheze
By Cy Cheze (Nov 10, 2011)

Several large Japanese firms suffer low profits and are able to service heavy debts only because local interest rates are about zero. Japanese firms are reluctant to abandon product lines, and their boards are passive. Panasonic or Sony would be insane to buy an unprofitable camera unit, when neither can make any profits themselves. Japan won't change until Chinese investors start to throw their weight. By then, the country will consist mainly of retirees content to live off divedends from stocks the Chinese tender in payment for Japan, Inc.

0 upvotes
RoyGBiv
By RoyGBiv (Nov 10, 2011)

For a company that needs capital...this is gonna be tough to survive.

0 upvotes
armanidog
By armanidog (Nov 10, 2011)

I'm not sure of Japanese law, would anyone who ever bought Olympus stock have a right to file a lawsuit? Hopefully, the board and executives who were found to be aware of the situation will be personally liable for criminal and civil actions. I hope they can not hide behind the corporate structure.

1 upvote
M1963
By M1963 (Nov 10, 2011)

A fraud is a fraud anywhere in the world! The members of the board must be dismissed and, if there is evidence of any wrongdoing (which is more than likely), prosecuted. That's the only way to restore confidence in the corporation and keep it alive.

Comment edited 29 seconds after posting
0 upvotes
NeoteriX
By NeoteriX (Nov 10, 2011)

FYI, under American law, directors and officers owe a fiduciary duty to the company, not directly to the shareholders. Shareholders may bring suit against D&Os, but as a "derivative shareholder suit." In other words, you are suing in the shoes of the company; the company as a whole is the plaintiff and wins whatever damages accrue, not individual shareholders.

0 upvotes
Cy Cheze
By Cy Cheze (Nov 10, 2011)

Criminal penalties for corporate fraud are seldom levied or enforced. Sentences over three years are uncommon, even in egregious cases. Some perpetrators will be able to pospone incarceration or be out on parole within months. The defendants can point to Board or auditor sign-offs on everything they did. Firms have armies of compliance "experts" who sign forms to shield the CEO from liability. Anyway, plaintiffs usually care less about revenge than money: where'd it go, how to recover?

1 upvote
dark goob
By dark goob (Nov 11, 2011)

Cy Cheze brilliantly points out the obvious: corporations might be better called "irresponsibilitions." Their sole purpose in existing is to allow people to be able to commit crimes without being able to be held to account. "Limited liability" = "limited blame-ability" = "limited responsibility" = "irresponsibility" ...

I still love my freakin' E-5 though!!! I feel sorry for all the Oly employees in the world whose retirement funds were chock full of Oly stock and now they're screwed. I'd be super careful about my trade secrets now if I was Oly (if they still had any left).

0 upvotes
wetsleet
By wetsleet (Nov 10, 2011)

"Investment losses"? I'm no corporate guru, but surely Olympus was in the business of making things. It was not an investment house. I understand that any business might choose to invest surplus cash if it does not think it can get a better return investing in its own enterprise, or as some kind of a hedge, but surely what is being spoken of here as "investment losses" over several decades is a euphemism for corrupt payments to directors, over several decades.

0 upvotes
M_Hobart
By M_Hobart (Nov 10, 2011)

The news reports are that Olympus was investing in derivatives and made quite a few bad choices. Also, apparently their favored investment brokers also made bad choices and gave bad advice and itself failed. There are a large number of business news articles available. This is not a case of having some cash and only risking that amount, but rather using that cash to leverage for a possible much larger gain, or in this case, loss. Just look at what happened with US real-estate derivatives. Financial gambling...

0 upvotes
Cy Cheze
By Cy Cheze (Nov 10, 2011)

Olympus and some other firms set up offshore investment subsidiaries or shells to buy the companies' stock, buoying the price, or to act as intermediaries to launder and disguise losses. If subsidiary X is a dog, sell it to offshore Y at a "gain," with debt funding provided by, offshore Z, which gets a loan from bank Q, which guaranty from company O.

0 upvotes
Jorginho
By Jorginho (Nov 10, 2011)

Better of being sold at first glance. Seems like too many on the board are corrupted or corruptable, seems like this has been a company culture if it has lasted for decades. These kind of cultures are pretty diffucult to change. Look at banks who carry on busniess as usual(well, their managers) even after their conduct has been an important factor for the current economic situation...

May be it is better to split it up and sell it to Sony, Panasonic or so in a way to get rid of those in command.

0 upvotes
Bob from Plymouth
By Bob from Plymouth (Nov 10, 2011)

At this rate my lovely Olympus E-1 will acquire value. It looks like the firing of former chief exec' Michael Woodford has started something.
My guess is that if they don't resolve this by the end of their financial year the company will be wound up or sold.

Comment edited 2 minutes after posting
0 upvotes
Austin101
By Austin101 (Nov 10, 2011)

tut tut tut

0 upvotes
Don Richardson
By Don Richardson (Nov 10, 2011)

I for one hope Olympus survives this. Olympus is a very innovative company that has brought a lot of technical first to the camera world as a whole, not to mention the DSLR. Things everyone laughed at at first but are now standard on most DSLR's now. If they fail we'll never know what we've missed out on. I do shoot with an Oly. E-30 but I'm not a fanboy.

1 upvote
Ross the Fidller
By Ross the Fidller (Nov 10, 2011)

Same here for me (with an E30). The other cameras wouldn't be what they are now without the features that Olympus has brought to the industry. They have forced a rethink in camera design & that can only be a good thing.

Comment edited 1 minute after posting
0 upvotes
russpj
By russpj (Nov 10, 2011)

This is really sad. olympus led the world of the system SLR with the OM1 - I owned one. Nothing like that system back then or now.

0 upvotes
bobo brazil
By bobo brazil (Nov 12, 2011)

Pretty sure Olympus cannot survive this. The product segments will be split up and offered to companies who can bring the products to market and prosper. Japanese companies will be given the preference. Nikon may be a top candidate for a few of the segments, especially the microscope group.

0 upvotes
Pork Slinger
By Pork Slinger (Nov 19, 2011)

$5 Billion to the mob. HSN should buy them.

0 upvotes
Total comments: 57