Olympus Headquarters Raided - Tsuyoshi Kikukawa Home Searched

December 21, 2011

Japanese prosecutors raided the headquarters of disgraced Japanese electronics manufacturer Olympus as part of an ongoing investigation into a massive accounting scandal.

National television showed on Wednesday dark-suited investigators marching into the Tokyo office building of the camera and medical equipment maker. The company confirmed the raid.

Japanese media also reported that the homes of former company executives, including former president Tsuyoshi Kikukawa, were searched. Kikukawa is suspected to be part of the cover-up of some $1.5 billion in losses on securities investments, dating back to the 1990s.

The 92-year-old company is under investigation by Japanese police, financial regulators and public prosecutors, who may bring criminal charges against senior officials.

The scandal first surfaced in October when then-CEO Michael Woodford exposed accounting problems, allegedly orchestrated by a small circle of senior officials.

He was fired by the company's board of directors shortly after the scandal unfolded. He is now trying to stage a comeback, appealing to shareholders and others that he can help clean up the company.

The scandal has left doubts about Olympus' ability to survive, but it avoided being delisted from the Tokyo Stock Exchange last week after filing revised earnings reports. It still risks being delisted pending the results of an investigation of the company's accounting.

Olympus originally denied wrongdoing in the case, but then acknowledged massive losses were due, in part, through a $2 billion purchase of a British medical equipment maker in 2008. The purchase price included a $687 million advisory fee, which was far above the usual fee paid for such a deal.

Another $773 million in losses was hidden through the purchases of three small Japanese companies between 2006 and 2008. The companies had little to no relation to Olympus' core operations.