Olympus sued by banks for $273m over scandal

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Olympus

REUTERS

Tokyo - Olympus Corp on Wednesday said six Japanese trust banks have filed a lawsuit against the endoscope maker seeking 27.9 billion yen ($273 million) for damages relating to a $1.7 billion accounting scandal in 2011.

The six banks, which include State Street Trust and Banking, Mitsubishi and The Nomura Trust and Banking, are seeking compensation for false financial statements submitted by Olympus in the 11 years to 2011.

Damages from the scandal continue to weigh on Olympus, with the announcement marking the fifth lawsuit it has publicly recognised.

The company says that nearly 20 cases have been submitted to courts seeking a total of 85.6 billion yen.

Olympus at its last earnings briefing said it would set aside 17 billion yen ($166.49 million) to settle three of the cases it has publicly recognised, which sought a total of 44 billion yen and were brought by overseas investors and medical equipment maker Terumo Corp.

The other two claims, including the one announced on Thursday, are seeking a total of 41.1 billion yen.

The six Japanese banks acted to meet a three-year deadline for submitting cases against Olympus since the scandal was uncovered, said a public relations officer at Mitsubishi UFJ Trust and Banking.

An exact cut-off date has not been decided by the court.

The five other trust banks had no immediate comment.

The six are seeking damages on behalf of investors whose funds they held, according to a representative at one who declined to be named.

Olympus saw its shares and profit dive in 2011 after former chief executive Michael Woodford alerted prosecutors and the media to a series of payments designed to cover up investment losses.

The medical equipment maker wrote down the value of several deals made over a decade, including its $2 billion purchase of UK firm Gyrus in 2008.

Olympus also paid the world's largest advisory fee, equivalent to one-third of the purchase price, in that deal.

Three former Olympus executives, including former chairman Tsuyoshi Kikukawa, were found guilty by a Japanese court in July 2013.

They were handed suspended jail sentences while the company was fined 700 million yen ($7 million) for violating securities laws.

Since then the company has swung back to profit, with Sony Corp paying 50 billion yen ($500 million) to become its biggest shareholder last year, when it also raised $1.2 billion in a share issue.

Olympus's shares have also recovered from a trough of 424 yen it scraped in 2011, after they lost around 80 percent of their value.

On Thursday its shares were off 1.2 percent at 3,020 yen, slightly outperforming the benchmark index which was down 1.9 percent in afternoon trade. - Reuters


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