Ex-Executives of Olympus Plead Guilty in Accounting Fraud

September 25, 2012

Three former executives of Japanese camera and medical equipment maker Olympus Corporation pleaded guilty on Tuesday over charges related to a $1.7 billion accounting cover-up of massive investment losses in one of Japan’s biggest corporate scandals.

Prosecutors charged Tsuyoshi Kikukawa; a former executive vice president, Hisashi Mori; and a former internal 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 the former executives could face up to 10 years in jail and fines of up to 10 million yen (about $128,000). The company could be fined more than 100 million yen, according to the Japanese media.

The scandal was exposed last October by Olympus’s chief executive, Michael C. Woodford, who was fired by the company’s board after asking about deals that were later found to have been used to conceal the losses.