Thursday, February 16, 2012

Former Olympus chairman Kikukawa arrested over fraud

Following a raid on Olympus's headquarters by Japanese prosecutors, the company's former chairman and six others have been arrested. Tsuyoshi Kikukawa is accused of violating the Financial Instruments and Exchange Act by covering up $1.7 billion in losses, which were exposed in part by the ex-company president and CEO Michael Woodford. Kikukawa was one of the 18 executives sued by Olympus over the scandal last month, along with former company auditor Hideo Yamada and former executive vice president Hisashi Mori, who were also arrested with four other members of staff. Not only do the employees face prosecution, but it looks like Olympus itself may well be subject to further criminal investigations as the full extent of the scandal becomes clear — not exactly what the company needs right now following its pessimistic forecasts.