Summary: Olympus had a huge speculation loss in the nineties. To cover the losses (and save Olympus?) Hideo Yamada and Hisashi Mori elaborated a “loss separation scheme” to hide the losses ($1.7 Million $) in acquisitions and fees. The report states that part of the management was aware of that (“rotten”), but that there is no link to the organised crime. That damaged the shareholders and the report clearly says that “fraudulent accounting” has been done. The report clearly advice the responsible managers to resign. In short, a revolution is needed.
The reaction of the market has been positive. Olympus shares had jumped as much 9% percent today (Source: Bloomberg). The main reasons for the jump is the chance that Olympus will not be delisted at the Tokyo exchange and that part of the board will probably have to resign.
But here is the “bad” question to you: What if they tried to hide the losses to keep the Olympus business alive? Wondering if Olympus would have survived if they wouldn’t have done that “loss separation scheme”.