More than a year after their arrest in February 2012 for hiding massive corporate losses dating back to the 1990s, three former Olympus executives this week received suspended jail terms for crimes they admitted committing. In a story marked as one of the largest frauds in Japanese history, the executives conspired to cover up approximately $1.5 billion in investment losses. Olympus itself was fined ¥700 million (about $7 million) for the actions of Tsuyoshi Kikukawa, former chairman, Hideo Yamada, former auditor, and Hisashi Mori, former executive vice president.
|Former CEO Michael Woodford and Chairman Tsuyoshi Kikukawa pose for the company's 2011 Annual Report|
The scandal came out in October 2011 when Michael Woodford, a UK citizen who was the company's first non-Japanese chief executive, was fired after his own investigations revealed accounting improprieties in the company's corporate acquisitions, including excessive payments to consultants. Following the revelations, Olympus shares lost nearly 80 percent of their value.
The main reason offered in a Bloomberg story for the short and suspended sentences is that former Olympus presidents Masatoshi Kishimoto and Toshiro Shimoyama were the ones who made the decision to conceal the losses, and Kikukawa was only continuing the coverup. Kishimoto and Shimoyama are immune from prosecution because the statute of limitations has expired.
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