Scandal-Hit Olympus Posts $620 Mn Annual Loss
Olympus on Thursday posted a $620 million loss in the year to March, a shortfall largely tied to a loss cover-up at the camera and medical equipment maker that hammered Japan's corporate-governance image.
The firm said it lost 48.99 billion yen ($620 million) in the fiscal year, after a scandal that sparked lawsuits and the arrest of former executives accused of hiding about $1.7 billion in investment losses.
Olympus said the result, which reversed a small profit of 3.87 billion yen a year earlier and was bigger than forecast, was largely attributed to costs related to the cover-up.
The company, which declined to give an earnings forecast for the fiscal year ending March 2013, said it booked sales of 848.55 billion yen in the latest period, up slightly from the previous year.
Olympus said the results were hampered by a not-previously-announced "additional special loss" of 8.82 billion yen, which included a "revaluation of assets" as well as "losses linked to the restructuring of systems-related businesses".
The company did not give further details, but said the additional loss also included cost tied to the liquidation of three firms central to the scandal.
Olympus bought the firms -- waste recycler Altis, cosmetics maker Humalabo and microwave-container company News Chef -- for nearly $1.0 billion, later admitting part of the funds were used in the scheme.
The company's shares have lost more than three-quarters of their value in the wake of the scandal, diving to just 424 yen at one point from 2,482 yen the day before the chief executive Michael Woodford was ousted in October for revealing the cover-up.
And two months later it narrowly avoided being delisted as it struggled to file a revised earnings report -- taking into account previous losses -- on time.
Last month, Olympus held a tense shareholders' meeting where angry investors peppered company executives with questions about the cover-up, while Woodford, who exposed the scandal, threatened court action after the firm's choices for a new board were approved.
Woodford and some of Olympus's foreign shareholders were angered by the slate of directors, whom they derided for their lack of experience or previous connections to the disgraced company.
But with the bulk of Olympus shares held by large Japanese institutional investors, who are typically unwilling to rock the corporate boat, the board had been expected to be approved.
Critics argued the new directors' connections to major Japanese banks -- also Olympus creditors -- was a conflict of interest, while they also had little experience running the company.
At the meeting, Olympus executives rebuffed Woodford's demand to know why he was sacked.
In March, the company and three former senior executives -- including ex-president Tsuyoshi Kikukawa -- were charged over their role in the scandal.
If found guilty, the firm faces up to 700 million yen in fines, while the executives could each be forced to pay 10 million yen and a decade in prison.
The firm initially denied allegations it had used past acquisition deals and outsized consultant fees to hide huge losses dating back to the 1990s, but eventually admitted wrongdoing.
Olympus shares rose 1.34 percent to 1,130 yen on Thursday before the earnings were released.
Source: Agence France Presse
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