Woodford sues Olympus. And Olympus sues ex japanese managers involved in the fee scandal.

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A short update to give you one more messy news about Olympus. The day after Woodford abandoned the plan to be re-instaed as CEO he sued Olympus. “I will most definitely be suing Olympus,” Woodford said Friday at a press conference at the Foreign Correspondent’s Club in Tokyo. And the “The Kyodo News Agency had heard that the panel would advise the company suing over 10 existing and former executives for a total equivalent to $1.2 billion for hiding losses for 13 years” (Electronista).

What else can I say? It’s a mess and it’s pity that there is no way to solve the problem in a fast way.

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  • TheEye

    I’m contemplating a wrongful death suit over the quasi-demise of 4/3. :-P

  • Robbie

    Bring up some new cameras show that Oly is still competitive will be the fast way.

    • Agent00soul

      Right! Still no new rumous about the coming camera?

  • BLI

    Normally, CEOs are paid quite well, and it is a normal part of the game for CEOs to be fired. Although one can strongly criticise the reason why they fired Woodford, the board probably had the right to do so.

    In my view, there are *two* scandals here. The first scandal is how a CEO (with the blessing of the board? With the blessing of the shareholders???) could speculate in properties, etc some 20 years ago — an activity far outside of the business of the company, I presume. This scandal is related to incompetence.

    The second scandal is the covering up of the loss, whether to save face/hide incompetence, or to hide the reduced value for potential investors. This is an ethical scandal.

    When it comes to the economical loss, this is actually money lost 20 years ago. This probably also means that had it not been for this loss 20 years ago, Olympus would have been in a decent situation right now. Thus, although this is a terrible loss of money for a company, economically it would perhaps be worse if the loss was due to running the company poorly in the core business.

    • spam

      There’s also normally some kind of compensation for being fired at that level. If Olympus has treated him according to his contract then I’d expect it to be difficult to get additonal money from them, if not then he might have a good case.

      I’d also like to see the judge who believes Olympus fired him for cultural differences and not for uncovering illegal activities.

      • BLI

        I know — I don’t know whether Percy Barnevik was fired by ABB in 1996 or so, but I seem to recall that he received some €100 million or so upon quitting. Many of these top executives also receive shares in the company; I assume this is part of their compensation for quitting at some stage.
        Personally, I have never understood why these people should have so much better compensation than the average employee.

        • @BLI @spam
          Japanese CEOs are not well paid or wealthy even less when compared to their Western counter parts.
          And as has already been established they didn’t benefit financially from their creative accounting. LQTM

          • Keeping your job and your retirement benefits would be a form of “benefiting financially” from fraud.

            • meh

              +1000000000000

              Of course they benefited from the fraud, if they admited their activity they would have been fired..

          • ckb

            Not sure that they did not benefit from the creative accounting. Olympus is suing past and present board members for 90 billion yen or over 1 billion US dollars. Not sure that it would be worth Olympus effort unless money is still missing.

            Who are you going to go for of the three untainted executive officers Masataka Suzuki Olympus Optical, Kazuhiro Watanabe Olympus USA and Shinichi Nishigaki Olympus Industrial Products. None have great ties to the imaging division. I guess in your book a crooked leader is better than no leader but usually you have to lie in the bed you made.

            • No, the suit against Olympus managers is for a few billion YEN, not dollars. Also, note that the suit names the current president, and apparently he has agreed to step down.

              • ckb

                Its really confusing the actual number they are suing for. The Japanese paper I saw said 90 billion yen or about a billion dollars. My Japanese is not that great but just suing board members seems very unusual in Japan.

    • Charles

      Japanese labor laws are quite a bit more strict than American laws. I don’t know about his level, but if any company fired me the way he got fired chances are I’d get my job back. It’s REALLY tough to fire someone here. Normally they just stop giving you work and have a special place to seat you until you quit. There is a special name for this that is escaping me at the moment. Even among my friends who have been laid off in this bad economy have been entitled to a year of pay at their full salary. I can’t imagine Woodford would sign away his most basic rights in taking the new job.

      • Gianca

        That term it’s called “madogiwa desk”, which means something like “given a desk near the aisle window”: a metaphoric term to refer to a worthless job given to someone the managent wish he would quit on his own.
        Definitely not something u could do to a CEO.

  • Rchard

    So Woodford is a greedy pi** ant after all.

    • digifan

      +100 Quite right.

      At first I thought him selfish, but I turned view 180, when all the details were out in the open.

      Now he proves my first point again.

  • Will

    Called it after last week’s press release from him in which he claimed that his wife has been “waking up screaming” due to the “stress” of her husband not having a job anymore. Join the club, freaking 1%er!

    • TheEye

      Well, if you were Woodford’s wife, would you want him hanging around at home all the time? No surprise she’s having nightmares. I myself dream of camera joshi. :-P

      • Miroslav

        :) :)

      • lnqe-M

        Aho ahooh, maybe he hunting new scanal. :-D

  • Dez

    I hope that Woodfords activity wont affect the release of the new “epoch making viewfinder” mirrorless camera in a negative way!

    • TheEye

      Hollywood invented “smoke and mirrors.” Olympus is learning.

    • It could be that we might have the new VF precisely because the management was distracted by the crisis and nothing stood in the way of engineers innovating.

  • Mar

    Since nobody will employ Woodford ever again, I guess it makes sense for him to get as much money as possible out of this ;)

    • TheEye

      Do you suppose Olympus will mail their board of directors shiny new tantō or wakizashi as retirement gifts?

  • Boooo!

    It’s Monday… I was hoping for more info about the upcoming camera and the sensor used in it :/ I need to know if I should start saving money for the E-7.

  • Berneck

    I thought you said there would be some hot Olympus news either Friday or Monday. I hope this isn’t it….

    • BLI

      I think admin said today, Monday Jan 9 at 9 PM London time. That’s still some 9.5 hours into the future.

      • Berneck

        9pm London time is the Fuji announcement.

  • > ” I will most definitely be suing Olympus”

    Surprise – I thought he already did it. But I believe he’s right now only a shareholder so that’s not really newsworthy IMO.

    > “It’s a mess and it’s pity that there is no way to solve the problem in a fast way.”

    This is not the mess. This is the finalization of the mess: all things took concrete shapes of concrete court cases.

    I do not know how fast Jap legal system is, but normally such cases can drag on for years. So we as well might forget about them.

    As soon as the Jap security commission clears the Oly, as soon as the delisting axe would be lifted, (both have 99% chances of resolving positively for Oly) the story would be, as we consumers concerned, mostly over.

    The only missing piece right now is the new Oly investor or investors. If those would be the “investors” (plural) then we do not care as the balance of powers unlikely to change. But there might be some disturbances ahead if the new shares would be purchased by single company – and new /owners/ decide to step in. But then again, even if those shares would have voting rights, IIRC in Japan shareholders have relatively little power compared to BOD/C*O. So things are unlikely to change in any visible fashion.

    Thus IMO the story, at least its newsworthy side, is really over.

    • Actually, it’s still a mess. Now that Olympus has sued its CURRENT president and board members, it means that the company is essentially leaderless. The operative question right now is who is going to lead the company. Most likely, it will be someone approved by whoever invests in the new share offerings. This is feeling more takeoverish and less business as usual.

  • lol

    Last week admin said he was gonna post a rumour about the oly camera, he said he was gonna post it friday or monday…i hope its soon.. :)

    • admin

      Posted ;)

    • 007

      It is not “Jap legal system” or “Jap security commission”.

      It is J-A-P-A-N.

      The misspellings sounded somewhat racist.

  • It is not a new “mess”, it is still the same mess and they are rather starting to clean up the mess by suing the executives – which is good news from my point of view. It is also the fastest way to proceed because the former executives will not simply “surrender”, for many reasons, as everyone can imagine. On the other hand they will not be able to pay all the damages anyway so this is usually the first step towards a settlement.

    Woodford suing Olympus is logic because he had the contract with the Olympus Company not with the former executives. But his claims may be part of the damages that the former executives should have to cover. A CEO is usually easier to be fired under most laws so maybe Japanese labor law does not even apply and maybe (?) this was (part of) the reason why Woodford was promoted to CEO in the first place and fired immediately afterwards. So it is also part of necessary clean-up.

  • very soon we will have less one imaging device manufacturer!

  • Charles Ramsey

    Back in the old days all the executives would have killed themselfs.

  • flash

    It would be news if he wasn’t. It fits in with his mode of operation. He might even get some compensation out of it, but not that much relative to his pay. I suspect that it will be an out of court settlement.

    We do not even know if Olympus paid what he was entitled to by his contract, for his last weeks of work; not to mention any required severance pay.

    I suspect he will be able to be employed, but as a talking head for a network or a PR firm. He would be pretty good in that role. He needs to think outside of the box, and stay in the United Kingdom. Heck, most of us would buy a book by him.

  • Jón

    Holy Hawkings Chair! Just buy Olympus already, Panasonic… Maitani is probably rolling in his grave.

    Well, I hope that Olympus survives as a camera company, I’ve always had a soft spot for them. The OM system was underrated, the compacts were good, and many digital camera designs were much more interesting than offerings from the big electronics/camera giants.

  • Pile

    Woodford and the hedge funds behind him planned the takeover of Olympus. It had completely fallen through and now they lost their heads. LOL

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