TOKYO: Japanese camera and medical equipment maker Olympus Corp. and three of its former executives pleaded guilty yesterday over charges related to a $1.7 billion accounting cover-up in one of Japan's biggest corporate scandals.
The scandal was exposed last October by Chief Executive Michael Woodford, who was sacked by the Olympus board after querying dubious deals later found to have been used to conceal the losses.
Revelations of the huge accounting fraud revived calls for more outside scrutiny of its boardrooms but have failed to trigger sweeping corporate governance reforms similar to those introduced a decade ago in the wake of US scandals such as at Enron.
"The full responsibility lies with me and I feel deeply sorry for causing trouble to our business partners, shareholders and the wider public," ex-Chairman Tsuyoshi Kikukawa told the Tokyo district court at the start of the trial nearly a year after the cover-up first came to light.
"I take full responsibility for what happened."
Prosecutors charged Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada with inflating the company's net worth in financial statements for five fiscal years to March 2011.
The three former executives had been identified by an investigative panel, commissioned by Olympus, as the main suspects in the fraud seeking to delay the reckoning from risky investments made in the late-1980s bubble economy.
The indictment did not specify what penalties the prosecutors would seek, but lawyers have said the former executives could face up to 10 years in jail and fines of up to 10 million yen ($128,400). The company could be fined more than 100 million yen, according to the Japanese media.
What if any impact the company's guilty plea will have on Olympus will depend on what sentence, including a possible fine, the court hands down, said Tsuyoshi Oshima, a spokesman for the medical equipment maker. That decision, he said could be several months away.
"Lawsuits from shareholders are possible," Oshima said. The drop in Olympus's share price has already spurred 12 lawsuits, including 11 in Japan, he said.
Woodford had campaigned to win his job back, but has since given up, blaming cosy ties between management and big Japanese shareholders and citing the strain on his family.
Olympus has already admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s.
In December, it filed five years' worth of corrected financial statements plus overdue first-half results, revealing a $1.1 billion dent in its balance sheet.
With its share price hit by the scandal and a hole blown in its finances, the company has been struggling to secure funds to cover its losses, triggering talk it would need to merge or forge a business tie-up to raise capital.
Yesterday, three sources familiar with the deal said rival electronics and entertainment giant Sony Corp. was likely to approve a plan this week to invest 50 billion yen ($642 million) in Olympus, becoming its biggest shareholder with around a 10 percent.
Olympus, former executives plead guilty
Olympus, former executives plead guilty
Egypt, Turkiye aim to increase trade volume to $15bn by 2028
RIYADH: Egypt and Turkiye have agreed to work toward increasing bilateral trade volume from approximately $9 billion to $15 billion by 2028.
This includes cooperation in exploration and development activities in the hydrocarbons and mining sectors, as well as in transportation and the automotive industry.
This agreement was confirmed by Egyptian President Abdel Fattah El-Sisi and Turkish President Recep Tayyip Erdogan in Cairo during the second meeting of the High-Level Strategic Cooperation Council, co-chaired by the two heads of state.
President El-Sisi emphasized that the agreement seeks to strengthen constructive cooperation between the two countries in the coming period. He directed companies and institutions in Egypt and Turkiye to work towards achieving this goal and explore ways to enhance trade cooperation, currently valued at $9 billion. He noted that Egypt is Turkiye’s leading trading partner in Africa, and that Turkiye ranks among the top destinations for Egyptian exports.
In his remarks, El-Sisi highlighted the importance of working toward increasing trade volume to $15 billion, removing obstacles to achieving this objective, and bolstering investments as well as all aspects of economic cooperation.
For his part, Erdogan said: “We are taking decisive steps toward our goal of increasing the value of trade exchange between the two countries to $15 billion. We are pleased that Turkish companies’ investments in Egypt are approaching $4 billion and contributing to creating more job opportunities.”
Erdoğan further stressed Turkiye’s commitment to establishing “an economic model in which the two countries complement each other, making us stronger in the face of global fluctuations.”
Anticipated Egyptian-Turkish cooperation in energy, transportation
The Turkish president revealed that mutual investment opportunities between the two countries will be discussed during the Egypt-Turkiye Business Forum, adding: “We see opportunities in developing joint projects in the energy and transportation sectors, which are of paramount importance in terms of regional energy security.”
Erdogan highlighted the positive impact of strengthening relations between the two countries on tourism, noting that they have attracted more than 500,000 visitors each, and added: “We hope to double this number in the coming period.”
The Egyptian-Turkish statement also noted the continued “significant potential for enhancing cooperation in areas including the automotive industry, infrastructure development, and tourism.”
It further stated that both countries agreed to cooperate on exploration and development activities in the hydrocarbons and mining sectors in Egypt, including through public institutions, and to exchange expertise in geological activities and modern mining technologies.
Egypt and Turkiye also signed memoranda of understanding in key areas, including cooperation in defense, investment, trade, and agriculture, as well as health, youth and sports, and social protection. They also established a national committee to promote and monitor Turkish investments in Egypt, with the aim of facilitating investment procedures.
The two countries agreed to strengthen cooperation in the electricity and renewable energy sectors within the framework of the MoU signed in September 2024. They also agreed to appoint national contact points to coordinate joint working groups in the fields of conventional energy, renewable energy, green hydrogen, and nuclear energy.
The Egyptian and Turkish presidents met in Cairo on Feb. 4 as part of a regional tour by Erdogan that included Saudi Arabia. This visit marks Erdogan's third trip to Egypt in the past two years.
Turkiye has been the largest importer from Egypt for the past three years, with industrial exports constituting the largest portion of Egypt’s exports to Turkiye, while petroleum exports make up no more than 12 percent of Egypt’s total exports to Turkiye.
