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Former CEO Woodford quits Olympus board to call for new management
Olympus' former CEO Michael Woodford has resigned his position as director of the company and called for a shareholder meeting to dismiss the rest of the board. The company's share price had started to recover some of the 88% value it had lost in the weeks since Woodford was removed as CEO for highlighting unusual payments by the company (he remained a director). Since then the company has admitted using these payments to cover up losses on earlier investments. An independent committee established by the company has reported it has found no evidence of the rumored involvement of organized crime syndicates in the deals. However, three board members, including the President and Vice-President have resigned over the issue.
In a board meeting last week attended by Woodford, the company agreed to start reviews of its corporate governance (to prevent such actions being taken again and to provide reassurance to investors) and on restructuring the business. Investment analysts have speculated that this second review could result in parts of the business being sold off to protect its core value. The company is currently dominated by its profitable 'Medical Systems' endoscopy business that makes up 42% of the company's value. The loss-making 'Imaging Systems' camera division makes up around 16% of the company, making it the third-largest segment.
Risk of delisting
The company has reiterated that it will be able to file its Q2 earnings reports by the deadline of December 14th - failure to do so would result in its delisting from the Japanese Stock Exchange (and thus the suspension of its shares, limiting its means of raising investment). Several overseas shareholders have been calling for Woodford reinstatement.
Meanwhile the initial independent committee's report is due to be published on December 2nd.