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Tokyo Stock Exchange Head Blasts Olympus

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Okreb

Okreb

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From the Wall Street Journal:

The head of the Tokyo Stock Exchange lambasted Olympus Corp. Friday, warning that the company risks shareholder lawsuits if it creates a third-party committee to examine past acquisitions that is biased toward management.

TSE President Atsushi Saito also faulted the management's slow response to questions about steep payments made in the deals for causing the sudden, heavy decline in the company's market value.

"If Olympus purposefully selects members that are skewed or in favor of the company, there is a possibility for shareholder lawsuits," Mr. Saito said at a news conference. "The management model is resulting in the decline of the company's own value."

He said the bourse recommended the company set up an independent panel to look into the deals before the company last week announced that it will create a committee.

"This incident is very regrettable. We are making tough demands on the company," he added.

Regulators and shareholders both at home and abroad have been pressuring the Japanese camera and endoscope maker for disclosure after questions on the deals came to light following a bitter board battle with former British chief executive Michael Woodford.

The deals include the $1.9 billion purchase of U.K. medical-technology firm Gyrus Group Ltd. in 2008, for which a little-known financial adviser based in the Cayman Islands received a total payout of $687 million. Olympus also bought three small Japanese companies for a total of ¥73.49 billion ($965 million) from 2006 to 2008. A year later, the company had written down their value by nearly $700 million.

Southeastern Asset Management Inc., Olympus's second-biggest shareholder, and Harris Associates LP, No. 4, had separately sent letters to the Olympus board seeking an independent audit. Asset-management firm BlackRock, another shareholder, has also contacted the company to request a third-party committee.

Here is the link for the entire article:
http://online.wsj.com/article/SB10001424052970203687504577003770949186812.html

--
Milt

Author of 'Brain Surgery, Self Taught'
http://picasaweb.google.com/okreb1
 
No wonder fourthirds never got off the ground, management of this company was more concerned with lining their pockets! Looks like the whole damn board is corrupt!

This may not affect my picture taking but it damn well affects my camera and lens purchasing, no need to invest in a company that looks like it's on the verge folding. It's to bad all the good people at Olympus will probably suffer because of the greedy Execs.

Bring back Woodford then we know your on the up and up and it might restore some confidence!!
--
Have A Great Day!

Darrell
 
I think the Oly BOD has been under the impression that most of the criticism came from abroad and that minor changes would be sufficient to pacify Japanese business and media. The fact that this is not the case is a good sign, even though it is bad for the current Board. If Japan Inc. turns on Oly and demands accountability, it will have to respond if it hopes to survive.
 
they are not that stupid. Or that arrogant. I think they are really trying to confuse and carry on.
Joedif said:
These guys are so arrogant (or pig headed stupid) that they just don't get it.
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Raist3d/Ricardo (Photographer, software dev.)- "You are taking life too seriously if it bugs you in some way that a guy quotes himself in the .sig quote" - Ricardo
 
Raist3d said:
they are not that stupid. Or that arrogant. I think they are really trying to confuse and carry on.
Joedif said:
These guys are so arrogant (or pig headed stupid) that they just don't get it.
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Raist3d/Ricardo (Photographer, software dev.)- "You are taking life too seriously if it bugs you in some way that a guy quotes himself in the .sig quote" - Ricardo
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Yeah, maybe so. Although, I think that as more Agencies start digging through the pile of BS, it will be harder and harder to do that

--
Objects in this post are closer than they appear
 
Friday from Reuters.

" (Reuters) - Former Olympus Corp Chief Executive Michael Woodford said on Friday he has met with U.S. federal prosecutors and hired a Washington law firm, as pressure mounted in Japan on the camera and endoscope maker to conduct an independent probe into controversial acquisitions."
--
Milt

Author of 'Brain Surgery, Self Taught'
http://picasaweb.google.com/okreb1
 
Member said:
they are not that stupid. Or that arrogant. I think they are really trying to confuse and carry on.
Click to expand...
Well then... sorry but... that would indeed mean they are arrogant, ignorant and stupid! What this BoD needs to do to move past this is as clear as day. Acting as though nothing has happened and 'it is business as usual' is not what they are to be doing right now.

The longer this BoD continues to dig in their heels and just plays musical chairs in their boardroom, the more disgusted I become at their ignorant and arrogant behavior. This behavior, which at best could be called public indifference, only makes them look all the more guilty of some serious wrongdoing. They really are beginning to look like arrogant, ignorant, stupid and useless scum.

And, because of this arrogant, ignorant and stupid behavior, I would like to see the book get thrown at them by every agency which can. It is just sheer stupidity for them to bring down their own company like this!

Patrick
 
MichaelKJ said:
I think the Oly BOD has been under the impression that most of the criticism came from abroad and that minor changes would be sufficient to pacify Japanese business and media. The fact that this is not the case is a good sign, even though it is bad for the current Board. If Japan Inc. turns on Oly and demands accountability, it will have to respond if it hopes to survive.
Click to expand...
That's part of the fascination with this case. Does it fade away over time, or is does this case change how Japan, Inc. regulates itself?

From a US perspective, where shareholder value is the name of the game, Oly's board looks like a disaster. The BOD is basically insiders with no committees for executive review or renumeration, no nominating committee to assure independence, and very weak outside directors. Who's looking out for the shareholder in a hot mess like that?

But this appears to SOP for many Japanese corporations. And to their credit, they continue to develop terrific products, maintain an engineering and manufacturing base. Which raises the question, would US style corporate governance help or hurt Japanese industry?

If the Olympus case were to trigger a change in corporate culture in Japan, it wouldn't necessarily be a move towards the US/UK/European model. For one thing, the way US corporations align the CEO with shareholder interests is through stock options. But that might not work in Japan which seems to value -- at least on the surface -- more egalitarian approach to corporate salaries.

Oly's core business is sound, but they are facing --

-- a governance crisis right now
-- a possible legal and regulatory crisis
-- uneven business performance, esp. in imaging
-- a balance sheet holding an unknown junk that need write downs
-- a heavily leverage balance sheet

This would be a classis turnaround opportunity in the US/UK. It'll be interesting to see how this plays out for Olympus.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/
 
Jeff said:
From a US perspective, where shareholder value is the name of the game, Oly's board looks like a disaster. The BOD is basically insiders with no committees for executive review or renumeration, no nominating committee to assure independence, and very weak outside directors. Who's looking out for the shareholder in a hot mess like that?
Click to expand...
This is not nessasarily all bad... but it is more dependant on the integrety of the board, w less checks to insure things don't get out of hand

Current US style management, where stock value and short term profits are placed above long term health of the company, employee well being or the environment around the company, may not be the best model either... and without regulation, this country would be even more of a disaster.

--
Art P
"I am a creature of contrast,
of light and shadow.
I live where the two play together,
I thrive on the conflict"
 
Art_P said:
Art_P said:
From a US perspective, where shareholder value is the name of the game, Oly's board looks like a disaster. The BOD is basically insiders with no committees for executive review or renumeration, no nominating committee to assure independence, and very weak outside directors. Who's looking out for the shareholder in a hot mess like that?
Click to expand...
This is not nessasarily all bad... but it is more dependant on the integrety of the board, w less checks to insure things don't get out of hand

Current US style management, where stock value and short term profits are placed above long term health of the company, employee well being or the environment around the company, may not be the best model either... and without regulation, this country would be even more of a disaster.
Click to expand...
It's a funny thing. As an engineer I'm with you -- long term value comes from innovation and requires putting long-term strategy ahead of short-term profits. But as I work on my retirement fund its gimme profits, baby, and gimme 'em fast!

The best companies, of course, do both. Everyone knows the glamour cases, like Apple. But take a look at companies like Honeywell which just seems to keep on moving with solid business, innovation, and a good looking strategy going forward. Or 3M, or W.W. Grainger. There are actually a lot of them. Nikon might be one, I just don't understand Japan markets well enough to be sure.

Oly could be one of them, too. They need to get the current monkey off their back, and get a decent management in place. Hopefully the shareholders can pull this off. That's doing it the hard way, though.
Art_P said:
--
Art P
"I am a creature of contrast,
of light and shadow.
I live where the two play together,
I thrive on the conflict"
Click to expand...
--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/
 
I think the issues of outside directors and and the emphasis on short term profits can be considered separately. Outside directors who are held accountable are a good counterbalance for insider who are more concerned with the self interests than those of shareholders. Stock options can be useful, but only if structured properly.

Much of the problem with the emphasis on short term profits comes from investor pressure as well as the norm in the US of tying annual bonuses to performance over the past year.
 
This comes from an investor blog --

Japan’s “zero” interest rate environment may in fact not be working to defeat deflation. It may be worsening the problem by enabling too many competitively weak companies to avoid restructuring and to continue to operate even as they deliver next to nothing to shareholder.

In general, looking at the upbeat first paragraphs above, then at the data, what do we think of the market? We think there are opportunities, but they will be found by carefully chosing those companies that are making the changes necessary to compete and profit in the international market.

If this is too wishy-washy, we will end with this: In a recent interview on Bloomberg TV, Marc Faber, for whom we have only admiration and respect, said that the Japanese market is now his favorite.

http://whitherjapan.com/2011/01/04/is-the-japanese-market-a-good-investment/

If Oly get's their act in order with the right management (easier said than done), they could be in a good position to attract investment. Until then they are pretty toxic.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
 
--

Raist3d/Ricardo (Photographer, software dev.)- "You are taking life too seriously if it bugs you in some way that a guy quotes himself in the .sig quote" - Ricardo
 
Okreb said:
From the Wall Street Journal:

The head of the Tokyo Stock Exchange lambasted Olympus Corp. Friday, warning that the company risks shareholder lawsuits if it creates a third-party committee to examine past acquisitions that is biased toward management.

TSE President Atsushi Saito also faulted the management's slow response to questions about steep payments made in the deals for causing the sudden, heavy decline in the company's market value.

"If Olympus purposefully selects members that are skewed or in favor of the company, there is a possibility for shareholder lawsuits," Mr. Saito said at a news conference. "The management model is resulting in the decline of the company's own value."
Click to expand...
Looks like Japan Inc. has also been given a nasty kick in the pants, their management practices also being exposed by Olympus' blast of negative publicity as the vehicle. They, too, risk loss of credibility and confidence by international investors as a result, something they can't tolerate in this recession.

I see Saito's comments as hopefully also meaning Olympus had better get a new board and independent investigation in place pronto or face consequences, along with a shot across the bow of other Japanese enterprises that they could be next. The jig's up, Olympus, your clownish behaviour has now been laid bare for all to see.
Okreb said:
Southeastern Asset Management Inc., Olympus's second-biggest shareholder, and Harris Associates LP, No. 4, had separately sent letters to the Olympus board seeking an independent audit. Asset-management firm BlackRock, another shareholder, has also contacted the company to request a third-party committee.
Click to expand...
More ammunition to force installment of a new board and initiate an independent investigation quickly.

This company has long struck me as totally tone-deaf to its western camera customers (which comprised over 70% just a couple years ago), their "let them eat cake" pronouncement that Olympus small-body DSLR users should simply "migrate" to a completely different platform in mFT being the poster child case.

I now realize how utterly detached the board has been from anything sensible in running their business since 2006, so small wonder at the bizarre "strategic" decisions handed down to Imaging. And all the more sinful the board's penny-pinching ways when it came to Imaging, all the while apparently lining their own pockets.

Like with chemo, hit them really hard and quickly, knock out the bad cells so the good can take hold and flourish again. This may be their only shot at survival.
--
Sailin' Steve
 
As each day goes by I get the impression that the BOD is just going to dig in their heels and try to spin doctor this situation in hopes that it will just go away, except the noose just keeps getting tighter and tighter.
--
Objects in this post are closer than they appear
 
Jeff said:
From a US perspective, where shareholder value is the name of the game, Oly's board looks like a disaster. The BOD is basically insiders with no committees for executive review or renumeration, no nominating committee to assure independence, and very weak outside directors. Who's looking out for the shareholder in a hot mess like that?

But this appears to SOP for many Japanese corporations. And to their credit, they continue to develop terrific products, maintain an engineering and manufacturing base. Which raises the question, would US style corporate governance help or hurt Japanese industry?
Click to expand...
I very much doubt that most Japanese firms have anything to learn from the huge salary inequities, shady stock manipulations and outright corruption that we have seen with some US firms.
Jeff said:
If the Olympus case were to trigger a change in corporate culture in Japan, it wouldn't necessarily be a move towards the US/UK/European model. For one thing, the way US corporations align the CEO with shareholder interests is through stock options. But that might not work in Japan which seems to value -- at least on the surface -- more egalitarian approach to corporate salaries.
Click to expand...
Exactly. As some commentators pointed out, Japanese corporation heads would by apologizing on their knees to their employees for some of the things that are SOP in the US. Things like throwing thousands out of jobs while voting oneself bonuses.
Jeff said:
Oly's core business is sound, but they are facing --

-- a governance crisis right now
-- a possible legal and regulatory crisis
-- uneven business performance, esp. in imaging
-- a balance sheet holding an unknown junk that need write downs
-- a heavily leverage balance sheet

This would be a classic turnaround opportunity in the US/UK. It'll be interesting to see how this plays out for Olympus.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/
Click to expand...
Good summary. perhaps we can still hope.
--
erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.
  • W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.
http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567
 
Darrell500 said:
No wonder fourthirds never got off the ground, management of this company was more concerned with lining their pockets! Looks like the whole damn board is corrupt!

Bring back Woodford then we know your on the up and up and it might restore some confidence!!
Click to expand...
You could not be more wrong, as is extensively discussed in

http://forums.dpreview.com/forums/read.asp?forum=1022&message=39652127

there is every evidence that W., a long-term corporate slash-and-burn-for-short-term-profits corporate shark would do absolutely nothing for Olympus camera users.

(or even to make their other product line less painful!)
Darrell500 said:
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Have A Great Day!

Darrell
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erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.
  • W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.
http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567
 
erichK said:
Jeff said:
From a US perspective, where shareholder value is the name of the game, Oly's board looks like a disaster. The BOD is basically insiders with no committees for executive review or renumeration, no nominating committee to assure independence, and very weak outside directors. Who's looking out for the shareholder in a hot mess like that?

But this appears to SOP for many Japanese corporations. And to their credit, they continue to develop terrific products, maintain an engineering and manufacturing base. Which raises the question, would US style corporate governance help or hurt Japanese industry?
Click to expand...
I very much doubt that most Japanese firms have anything to learn from the huge salary inequities, shady stock manipulations and outright corruption that we have seen with some US firms.
Click to expand...
You're overgeneralizing. There are warts, to be sure, but the best US firms are amazingly efficient and productive. I'm not going to defend excessive CEO compensation, but stock options are a reasonable way to align corporate management with shareholder interests.
erichK said:
erichK said:
If the Olympus case were to trigger a change in corporate culture in Japan, it wouldn't necessarily be a move towards the US/UK/European model. For one thing, the way US corporations align the CEO with shareholder interests is through stock options. But that might not work in Japan which seems to value -- at least on the surface -- more egalitarian approach to corporate salaries.
Click to expand...
Exactly. As some commentators pointed out, Japanese corporation heads would by apologizing on their knees to their employees for some of the things that are SOP in the US. Things like throwing thousands out of jobs while voting oneself bonuses.
Click to expand...
The flip side of innovation is often the destruction of outdated businesses and technology. The real issue isn't job losses -- that's what happens when there are winners and losers in business. The challenge is to have an strong economy that can offer those same workers other jobs at good wages.

I couldn't care less about CEO apologies, on their knees or otherwise. What matters is that they do their job and set the corporation up for success.
erichK said:
erichK said:
Oly's core business is sound, but they are facing --

-- a governance crisis right now
-- a possible legal and regulatory crisis
-- uneven business performance, esp. in imaging
-- a balance sheet holding an unknown junk that need write downs
-- a heavily leverage balance sheet

This would be a classic turnaround opportunity in the US/UK. It'll be interesting to see how this plays out for Olympus.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/
Click to expand...
Good summary. perhaps we can still hope.
--
erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.
  • W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.
http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567
Click to expand...
--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/
 
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