Olympus has been wracked with legal problems since former CEO Michael Woodford blew the whistle about the company's shady accounting back in October of last year. Now, Olympus, three of its former executives, and three others are all being charged with accounting fraud by the Tokyo District Public Prosecutor's Office. If convicted, Olympus faces fines of up to ¥700 million (about $8.6 million), while the executives involved each face fines of up to ¥10 million (about $124,000) and up to ten years in prison.
The troubles all stem from Olympus's attempt to cover up approximately $1.7 billion in losses by exploiting Japanese accounting loopholes, and the three non-Olympus defendants are suspected of coaching the company in how to do it. The men are Akio Nakagawa, the former managing director of the Tokyo branch of Paine Webber (an American asset management firm); Nobumasa Yokoo, the president of Japanese consulting firm (and search engine nightmare) Global Company; and Taku Haneda, another Global Company employee. The ex-Olympus executives charged are former CEO Tsuyoshi Kikukawa, former vice president Hisashi Mori, and former auditor Hideo Yamada. The charges come at the behest of the Japanese Securities and Exchange Surveillance Commission (SESC), which believes the group conspired to overstate Olympus's book value by more than ¥110 billion in each of its 2007 and 2008 financial reports. The six men were originally arrested back in February, along with a seventh — Global Company employee Hirofumi Ono — who has not been charged.
Japan's nearly 100 percent conviction rate doesn't look good for the six defendants, but maybe now that charges have been filed, the entire board is resigning, and Olympus has sued 18 of its former executives with fraud, things can start getting back to normal for the troubled company.