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Woodford says: “company needs to be cleaned up”. Huge -23% value drop of Olympus shares.


What you see on top is a screenshot taken a couple of minutes ago (14:00 London time). It shows the market reaction after the latest ex CEO Woddofrd statement at Bloomberg: “The whole board is contaminated and that company needs to be cleaned up. The whole board have had discussions and vote unanimously and no one asks anything. It’s just complete and utter obedience to Kikukawa.” And “There were $800 million in payments to buy companies making face cream and Tupperware. What the hell were we doing paying $800 million for these companies?”. And there is more coming from W.: “The eventual cost of the Transaction to Olympus is extremely significant and is as a result of a number of actions taken by management which are questionable and which give cause for concern. We were unable to confirm that there has been improper conduct, however, given the sums of money involved and some of the unusual decisions that have been made it cannot be ruled out.” The end of MR.W interview sounds a bit dramatic: “I was extremely concerned for my safety and well-being, left Japan on the first available flight to London via Hong Kong on Friday afternoon.

What I didn’t know until today is that Woodford recommended Kikukawa and Mori resign from the board in an Oct. 11 letter!!! And only three days later Woodford was fired.

No matter who is right, the market believes in Mr. Woodford story. Goldman Sachs Group Inc., JPMorgan Chase & Co. and Nomura Holdings Inc. cut Olympus’s ratings after the ouster. Something has to change inside Olympus, because many out there are not trusting them anymore!

  • to be honest
    from what I’ve read Woodford comes across as a bit of an idiot who shouldn’t of been made CEO in the first place, he’s acting like a spoilt baby chucking his toys out the pram.

    The Gyrus Group thing sounds like a smoke screen…

    Any decent investors will be in it for the long term and as been reported “An equity strategist at a Japanese brokerage said foreign investors likely drove the selling.”

    • ihateidiots

      Do you even have a logical reason to objecting to what the man said? Because ironically, you sound like a spoilt child petulant when your favourite toy isn’t what it is supposed to be.

      • @ihateidiots
        I don’t object to what he said, it’s his opinion, but when CEOs get dismissed they don’t usually act like Woodford is doing no matter the circumstances…

        Olympus statement:

        • tofino

          No matter what the circumstances?

          So, are you saying that if his allegations are true that he should have kept quiet?

        • > I don’t object to what he said, it’s his opinion, but when CEOs get dismissed they don’t usually act like Woodford is doing no matter the circumstances.

          Ever wondered why CEOs get a hefty “severance package” when they leave a company? You are only one step from enlightenment.

          Otherwise, MR.W IMO behaves like a responsible CEO of a public company – responsible to the stockholders.

          While he was in, he tried to do it internally, without publicity. He had to: CEO are obliged to lie about company to non-stockholders, painting it all rosy and smooth, to prevent the harm to the shares price.

          Now as he ousted nothing stops him from speaking his mind.

          Though for sure Oly would (they have to) retaliate with a lawsuit for slander (or whatever it is called in this case).

        • You’re missing one thing: Woodford is still on the board of directors and still has a fiduciary responsibility to shareholders.

          If you read the full set of material available you discover this: Woodford contracted with auditor Pricewaterhouse to investigate the dealings in question (which total over US$1 billion in money likely transferred outside the company for unknown reasons). When he received their report back, he asked Kikukawa and others to resign. In that he was doing his job as CEO. Kikukawa’s response was to hold a supposedly 10-minute board meeting at which Woodford was fired and told to leave the country immediately. Woodford has said that he did so because he was afraid for his safety (more on that in a bit).

          Given the board’s response to him and his continued fiduciary responsibilities as a board member, he really has no other outlet but to publicly release materials. At this point, that consists of multiple letters and the Pricewaterhouse report.

          This all started with publication of articles in a Japanese magazine called Facta, which basically accused Olympus of financial shenanigans, apparently in collusion with anti-social groups. In Japan, one such “anti-social group” is the Yakuza.

          The bottom line is still the same: Olympus bought a facial cream, medical waste disposal, and personal food storage company that had virtually no sales or assets. They wrote almost all of that money they spent (US$780 million) off very quickly. The acquisition everyone is writing about had a 35% investment banker fee to a Cayman Island outfit that no longer is registered there. Typical fees in a acquisition would be in the low single digits, with 1% being very typical on a deal that size.

          One problem I see is that this seems to be an ongoing issue with Olympus. We now have at least five questionable acquisitions, plus I can name a couple more that haven’t yet been questioned (including a chain of cell phone stores with no real assets).

          If Olympus wanted to shut Woodford up, they should have dropped him from the board. This is no different than some of the stuff that went on with HP’s board not too long ago. Once a board member is shut off from the rest of the board, their only outlet is via news organizations.

          Olympus management prior to Woodford wanted everyone to look the other way on what is purported to be over a US$1 billion worth of bleed. If even remotely true, this calls into question Olympus’ current board. The Japanese equivalent of the SEC has yet to check in on this, but at this point, they almost have to investigate.

          So my question to you is this: if you were asked to overlook something illegal that could put you in jail, would you? If you were then fired for not overlooking it, would you just go quietly? There’s a strong chance here that Woodford is acting in the best interests of Olympus shareholders. Yes, it’s messy, but big problems are sometimes really messy.

          • cL

            @Thom Hogan

            From what I’ve read in your report (and I am relying your data to be factual) I’m under the impression Olympus was under coercion of Yazuka (Japanese version of mobster, for those who don’t know). That means the questionable acquisition was probably made via the control of Yazuka group as a mean of money laundry. Whether it is willful cooperation or under cooperation, if what Woodford’s allegation is true, that means the disclosure would cause a scandal and possibly the dissolution of Olympus Corporation (and who knows what would Yazuka do to Olympus executives and Mr. Woodford himself). Because Woodford’s lack of understanding Japanese culture, perhaps he didn’t realize the dire consequence of his “whistle blowing.”

            I also need to provide a more positive side of the story (as the best argument is often multi-faceted). Perhaps Olympus bought the businesses in question to diversify its business. It’s not the first time a conglomerate does that. Coach (handbag maker) was owned by Sarah Lee (sponge cake maker). Hyundai and Samsung makes everything you can think of in Korea. Before Nokia was a cell phone maker, it was (and still is) a toilet paper company. There are reasons why companies want to keep their other interests as vague as possible to public, as a way to control brand image, and Woodford outburst may provide embarrassment to the management, and was fired for that reason.

            In any case, the most powerful voice is often the silent one. And the best defense is usually a dignified silence especially if the allegation has no basis (and therefore, undefendable, how can you defend yourself if the accuser doesn’t care if what he said has truth or not?). I am surprised it’s a British who couldn’t control his mouth…. What he speaks out shows his character more than the company he is accusing. In any case, silence is golden so I should follow my advice. Maybe Woodford is actually employed by competitors…. Woodford’s dismissal due to misfit to the company culture is not the first nor will be the last in the history of business.

            • The money went somewhere. At this point, any guess is as good as another, but it’s a lot of money. It could just as easily have been bribes to politicians as anything else–there’s just no clue other than the use of the words “anti-social group” by Facta. Unfortunately, those words mean a lot of different things in Japan, and since I still can’t find the original article I can’t verify what Japanese words were actually used.

              No, Olympus didn’t buy a face cream company and then write it off its books the following year because it was in a diversification mode. Ditto a waste management firm. Ditto a Japanese form of Tupperware type containers. Ditto a small chain of cell phone stores. Absolutely none of those acquisitions fit into the actual businesses Olympus was in or was said to be interested in as far as I can tell. The fact that they wrote the acquisitions off quickly after making them is another clue, I think.

          • > Yes, it’s messy, but big problems are sometimes really messy.


            More than often it occurs to me that Nikon doesn’t supply you with sufficient news traffic. Even Nikon 1 wasn’t sufficient. ;)

            Good work, Thom. Keep it up. In age of corporate sponsorship, we need independent commentaries like you more than ever. One can think of your bias toward Nikon – but that in my eyes only improves quality of your critique of the (small) competition (like Olympus). :)

            • Chuck

              What do you mean? I do not see bias just someone who wishes the camera companies used their resources to better their product. A rational company usually sticks to their core business. Overpaying for companies of questionable fit has been a disaster for many big companies. To get a better camera from Oly they need resources that’s why this blunder is so maddening to Oly fans and critics.

            • The funny thing about your remark is that I haven’t mentioned what’s happening with Olympus management on my site. Only here ;~).

      • digifan

        @ihateidiots. Does he (Woodford) even have proof of what he bleats.
        I think this is pure speculation, nothing substantial, so pure revenge and out to bankrupt a company. Not exactly a gentleman.
        A stupid CEO at that, he should have known the corporate “slang”.

        • Jim

          follow the money $800,000,000 of it! – I think he might have a point!

          Sounds like oly is as doggy as their sensors :)

          • Dumdum

            Which isn’t even Olympus’ to begin with. Those are Panasonic sensors.

          • Woody drives a Ford

            Proven wrong by today, Nov 8th.
            I like Olympus cameras, but management failed miserably. Fire the corrupt geezers and restore reputation by launching good products.

        • Woodford has released letters and an auditor’s report. They are not flattering to previous Olympus management. Whether that’s proof of anything can’t be determined at the moment. However, he is not just going around shooting off his mouth, he’s providing paper evidence to reporters.

        • chuck

          In his interview he seemed like an honest person who had the responsibility to talk with investment groups around the world and be able to explain the company’s financial position in the middle of this summer. Obviously the information on the questionable transactions was hidden from him and he found out about them after these meetings. When he asked for information and clarification that he needed he was stonewalled. This put him in a bad position. He had told investment groups about the company financial position however obviously there were other factors he had not previously known about but was now aware of but could not verify. He was in a no win situation, he was obligated to tell investors and no one in the company would tell him the truth. Its not speculation, its about a company being honest and transparent in dealing with investors.

          He is does not seem afraid or vindictive considering he is most likely unemployable after this debacle. I think he wants the truth to come out because he feels wants left of reputation is at stake. Olympus cannot pay him to shut up because his questions are already out and will have to be answered before company value will rebound.

          What is bad is that the CEO of a company was fired for asking questions about something that had already been reported in the press. I cannot understand the Olympus Board’s actions because the firing of Mr. Woodford has caused much more trouble than disclosing embarrassing transactions. Obviously the Board did not consider the consequences of their actions. This strengthens Mr. Woodfords case of at minimum that the Olympus Board is incompetent. Not many Corporate Boards can say that one action could cause the company to lose 40% of its value.

      • ***Michael Woodford is going to be interviewed shortly at 7pm, live on Channel 4 News in the UK***

    • tofino

      I’m mystified why some people who love Olympus cameras seem to also have an uncritical need to blindly support the company’s management. Whether or not Woodford is a jerk is irrelevant to the fact that there is evidence of a possible corporate scandal. As a long time Oly fan, I find this upsetting.

      • tofino
        I wouldn’t wish his behavior on ANY company. This “corporate scandal” from 3 years seems to being blown out of proportion, it’s being made to sound they’ve been drowning puppies or cutting off babies heads!

        • You seem to be conveniently overlooking something. The chairman of the board and the other board members certainly were part of the acquisitions in question, and some of those acquisitions still are represented in current results. There seems to be an implication in some of the things that Woodford is saying that such acquisitions are continuing or would continue in the future. Frankly, I can’t see how you think US$1 billion is “blown out of proportion.” That’s certainly enough money to fix the camera division ;~).

          • cL

            @Thom Hogan

            I hope I don’t sound like targeting you, but anyways, you seems to be reasonable, so it seems discussing with you is actually achieving something…. The others may be a little partisan on issues.

            Anyways, your analysis seems to be reasonable. But remember I always stay out of speculation of this sort, whether it be this scandal or what they were thinking when they make a product because we are given insufficient data.

            There will always an ample amount of people who self-declared to be political insiders or business insiders, much the same way people who follow Hollywood stars’ private life based on tabloid…. They all speak as if they knew the stars personally, but what they really achieve is to misinform people and disrupt involving party’s lives and making finding out the truth even more mythical than it already is. Who cares who Princess Diana was dating after she left Royal family? But the result of “harmless entertainment” in this case, turned deadly. Be responsible for what we speak, is all what I am saying. Silence is golden.

            • I’m simply trying to understand this thing. Regardless of who you think is at fault or what might have happened, a near 40% drop in the value of the stock now puts Olympus in a tenuous position, and the questions concerning management’s due diligence are likely going to have some impact going forward. The camera group was already under tight scrutiny for its recent performance. This isn’t going to make things easier for them.

          • Joel

            Exactly even if it was a few years ago… If true…

            1) It is money that could have been used elsewhere to futher shareholder value rather than funnel it off to someone in tha cayman islands..

            2) The people involved are still there, so unless it is dealt with how do we know it won’t continue..

            I don’t understand people attacking Mr Woodford, he was sacked within weeks of being promoted seemingly becuase he was highlighting corruption (that showed the board diluting the companies value presumably for their own benefit, surely not for the shareholders)..

            If true and they fired him to keep the full extent of what happened under wraps, I think he is doing the right thing.. Because if he does care about Olympus he should make it public to ensure (again, if true) that the people involved are removed from the board, and also even if he doesn’t care about Olympus anymore if he knew about possibly illegal activity he really should inform the authorities and let the shareholders know..

    • chuck

      I am sure by your statements you have never worked in Japan. This is the same bunch of people who told the world for weeks that the Fukashima Reactors had not melted down even though the rest of the world knew when reactor buildings were blowing up that there was a very grave problem. This example is the norm not the exception. The Japanese Business Manager will never give bad news even when they have been swindled or robbed. Mr. Woodford openly gave his opinion to the board, made his reasons available to the shareholders and tried to focus the company on its core business. Any shareholder would like to know this information. Open your eyes, the ratings companies lowered their rating because Olympus is not being open and above board. This will make it difficult for Olympus to borrow money and even when they are able to borrow it will cost them more.

      Obviously this is not enough to damage the company badly however they will now have to look at ways to tighten their business focus on their cash cows. This is why they promoted Woodford in the first place. To maximize company value you cannot be dumping money in questionable dealings that are not part of the core of your company.

      Would you buy shares in this company? If you would, I have some shares in Eron that I would like to sell.

      Bash away, I am sure you would make a good yes boy for the chairman of Olympus

      • digifan

        Sorry pal but Woodford is “in” the company for many years. He should have known the slang.
        And like you say he’s damaging the company a lot. We’re talking about a business with many (ten)thousands employees. Olympus is not only the managing board.
        So yes, I think Woodford is a selfisch, egoistic …. (you fill it in)
        He doesn’t back up his story with substantial proof, and kicks as a spoilt brat.

        • chuck

          Woodford asked the question how can he reofrm a company that was pissing away its money. He wanted that to stop. He knew he would either be affirmed or fired. No one wants to be fired but he has every right explain his actions.
          The Board of Olympus is reacting rashly since they should have had a settlement with non disclosure clause before they fired him. The Board does not seem to want to maximize shareholder value.

          • spam


        • Joel

          “And like you say he’s damaging the company a lot. We’re talking about a business with many (ten)thousands employees. Olympus is not only the managing board.”

          If there are really dodgy practices and he was fired for trying to clean up the board, he SHOULD say what is happening as in the long term it is in the shareholders interests for the responsible parties to be removed from the board… Of course assuming it is all true..

          “He doesn’t back up his story with substantial proof”

          He does and has provided it to the authorities according to the news reports.. Authorities in England though.. Also in other articles it was said that the previous auditor KPMG brought up some large inconsistancies in relation to these same matters, they were also immediately let go according to what I read, but they are responsible to their own shareholders not Olympus’s so they won’t comment on what they found…

      • K. Schimdt

        That’s not what really happened in Fukushima, as far as I read at the time, it was much more like the media – mainly US media – were making a fuss about things that they were mostly speculating about saying that it was way worst than Chernobyl. I always think who is the US to demand things, what credit do they have? Because they really haven’t any, even more in International matters when they often do whatever they want even when UN says no, e.g., Iraq invasion. Anyway, I think you should think a little bit more before giving statements like that, even more if you just read from mass media source. The people from Fukushima Reactor cannot be blamed so bad like that, how could they, it was one of the biggest earthquakes registered. The main guys from Fukushima even made a public apology, which is not very likely to happen much often out there, anywhere. And in cases like Fukushima the consequences for any statement is very severe, panicking, huge money loss, panicking from international market, etc. So don’t make simplistic comparisons like that, generalizing things.

        And I kind of agree with the other guy, with a position as high as a CEO, it demands more work ethic when you are fired. You just don’t start talking your mouth out like that, the consequences are too high, so yes, he looks like a spoiled brat. Depending of what happens next, a lot of employees that has nothing to do with it can be fired in mass because of the stocks loss and that’s only one thing. If the world was so simple like that. Of course, depending of the real situation, maybe Woodford made the right thing, but we can’t saying things for sure like that, that’s just stupid, because we don’t know the actual facts.

        • chuck

          I cannot believe you agree with a company and a government lying to the people. Lying as a corporate entity you are committing fraud. The short term and long term prognosis for the region and the people are very poor not helped by people under reporting of the crisis. My company had to evacuate 12 families from Japan at our cost for no reason because we could not believe what the government or Tepco was telling us.

          I was just giving an example of the systemic lying by middle management of both government and companies when there is bad news. Middle managers in times of crisis have no direction from higher because leaders because they cannot make a decision without a team consensus. I lived and travelled in Japan for many years and have witnessed on many occasions when something is reported as a minor incident however weeks later is discovered that is was a major incident. Always some fool would have to go on television and apologize for their actions (lie now apologize later) Olympus response to Woodford questions and firing looks like the middle managers put some smoke screen together because they have no direction or good answers from top.

          Not many shareholders keep shares in companies that do not tell the truth or are not transparent about major investments.

        • You obviously haven’t been following the Japanese news. I’ve been watching NHK TV since the quake, and other Japanese news sources. The number of things the government concealed is so long at this point I can’t even begin to type them all. This month it was discovered that Cesium levels in some parts of Tokyo are higher than the minimum that requires quarantine in Chernobyl. Tokyo. Not 180 miles away at the reactors.

          I’ve got many friends in Japan, and this is no trivial matter to them. Whereas they used to trust their government, I see that many are now starting to question it instead.

          The cover up is always worse than the mistake being hidden.

          • Including one story which turned out to be high levels of radium measured from some old bottles containing fluorescent paint powder. Meanwhile background levels in Tokyo are normal and those in Fukushima quite low in the majority of places, especially when compared to locations like Ramsar.

            I’m not by any means saying the situation or radiation levels are safe (especially when the elevated levels are artificial as opposed to natural background radiation), but these stories of isolated hotspots are being blown out of proportion and trying to paint it as the government hiding things is even more far-fetched.

            I’ve little doubt things have been hidden by TEPCO, the government and other parties, and that there are isolated hotspots, danger zones and that more effort is required to clean up such areas. But how exactly does finding hotspots relate to the Japanese government covering things up? Especially when citizens are walking around with geiger counters finding them and the media is picking up such stories.

            • There’s a fairly consistent theme in all of the radiation monitoring in Japan: the government isn’t discovering things, citizens are. That’s been pretty true since day one: it’s been the independent folk wandering around that have found significant hot spot after hot spot. In one case that really started to open my eyes, the government had relocated some folk to a particular shelter in what the government said was a safe area. Turns out it was one of the hotter areas when it was independently monitored. There’s also this constant “the food is safe no it isn’t” thing that’s been going on.

              The simplest way I can put it is this: there is clear evidence of radiation hot pockets and radiation in places where it wasn’t expected. Radiation is like that, it doesn’t spread evenly or thin out on a predictable pattern with distance. After six months of watching almost nightly reports and reading weekly summaries, I can’t remember a single case where the government was the first to report a problem (I’m sure there must have been a couple, but the sheer consistency of independent reporting of new problems would indicate to me that the government is not ahead of this problem; shouldn’t that be one of the few things a government would do?).

              • The government has been monitoring radiation and local municipalities providing background readings since the start of the disaster. Anybody can view them by going to the respective prefectural websites. It might not be quite as easy to find them now, but during the crisis they were front and centre of pretty much every municipal website. You can find Fukushima readings here:


                And Tokyo readings here:


                As for citizens discovering things, this is quite natural. It would be prohibitively expensive if not impossible for the government to deploy teams to take accurate readings of every square metre of the country for hundreds of kilometres surrounding the disaster site to search for hotspots. They have given advice on where to look out for hotspots (such as on page 20 of the below document) and to notify the respective health and safety departments if and when hotspots are found. That’s all without mentioning that civilian devices are prone to misreadings and user error.


                There is plenty to criticise the government for over the handling of the situation, and areas where greater efforts are needed. Clearly there are hotspots that pose a risk (although how serious is debatable, since virtually no human being would sit in one place long enough to absorb a lethal dose of radiation of the likes measured at some of these hotspots in Tokyo). I myself am not fully aware of the measurements taken for regulating contaminated food (although there are restrictions in place), nor what ‘safe’ levels would be. In fact, consensus on this area is still cloudy, and different experts will tell you different things:


                In short, it’s very difficult for layman like you and I to accurately assess the situation, especially given the lamentable record foreign media has in reporting on the Fukushima case and the conservative approach the Japanese media has taken. It’s hard to know what sources to trust any more, so prudence above all is probably the best advice. A personal dosimeter might also be useful for those living around the area in the years to come, especially to monitor locations where human activity is most active and prolonged.

    • mpgxsvcd

      All I know is that this is very serious news for m4/3s. Panasonic cannot expand the m4/3s market alone. The beauty of the format is that there are so many choices in lenses, bodies, and accessories now.
      Without Olympus all we have is a format with horrible distribution problems. This is a very sad day for m4/3s.

      I honestly believe m4/3s will survive this. However, Olympus has to get their head back in the game if that is going to happen.

      • mahler

        I believe the product strategy reflects since a long time, what is going on at the board: unwillingness to see the failure of 4/3 and subsequently a stubborn PEN-only product policy. Olympus never realized the potential mirrorless truely has: diversity in body concepts. On the contrary, they play the PEN mythos, which almost nobody cares about, producing nearly indistiguishable camera bodies with random feature distribution, instead of offering clearly different body concepts as Panasonic and other competitors have shown. They left the stage for the competition, when m4/3 was introduced, and continue with that now, when considering the innovations brought to the m4/3 format, and mirrorless in general.

        • Dumdum

          Except that the Pen series has been a solid seller in Japan, and the Pen mythos has actually some value to it. People who lived through the film era and are now using digital still have fond memories about the Pen F. Same with the K1000, the LX, the F, and a whole smorgasbord of popular models then.

          Just because it’s not a Canon or Nikon doesn’t mean it has no brand value.

          My hope here is that the engineers are kept intact and given the green light to keep doing what they do. A number of the newer features in cameras were introduced by Olympus, only that their marketing (and if true, a dodgy board) failed them.

      • JCC

        Welcome to the world of Japan. Now you know why the rest of Asian hate them. Considering what they did in WWII and how they conceal and deny anything bad that happened then it is any wonder they would still play the same games today?

        • Jon

          I don’t condone what Japan did to other nations, but at least they had the balls to kick out the Europeans from Asia. Every time I go to Asia, I vomit a little at the filth the Europeans did to the Asian nations.

        • Dumdum

          I’m Asian and I don’t hate them. The locals here in Singapore where I work don’t hate them. Thing is, we know the Japanese generation we mostly interact with today aren’t the same people who committed atrocities 60+ years ago. We know not to judge based on race or political borders, but by the actions of each individual. Emperor Hirohito’s actions I judge differently from, say, Akira Kurosawa’s, and I don’t blame the latter for crimes done during the second world war.

          Unfortunately, you seem to be mired in the same racist personality that has dragged down human progress for a long time. Here’s hoping you learn eventually.

      • flash

        I wonder if Panasonic or Sony will survive in the next decade.

    • woka woka

      I can tell you Woodford was not doing such a bang up job in the US. His cutting and slashing is crippling the company. The bottom line is.. he wanted to show investors the cost savings and fast. He took some very big talent abruptly without knowing their posistions. He chopped for salaries leaving the camera division floundering.He brought in his own people from the UK. Why? Question, “why close Canada, California slash fifty percent of the jobs in NY let go over seventy percent leaving the depts way to lean or non existant. Then he sent all the work to NY. Making it into a virtual sweatshop!” Salesforce,Reverse,Directors, VP’s, Managers, Mr Woodford wasn’t the great leader he is making himself into. The heads in Japan are telling the truth. He was doing a terrible job. However did he also try to blackmail them with the information and used it when he was getting canned!

  • Oh. Oly, say or do something. Please get back to sympathy route. I like to stay fanatic fanboy!

  • Chris

    “The whole board have had discussions and vote unanimously and no one asks anything. It’s just complete and utter obedience to Kikukawa.”

    Oh man, no wonder he couldn’t cope in Japan. It’s not ‘utter obedience’, just everything’s sorted out in personal debates beforehand. Ideally the board meets when there’s a consensus so that no-one loses face by their views being attacked amongst all their peers. He’s worked for a Japanese company for decades. How does he not know this?

    He’s clearly — and understandably — a very upset and humiliated man seeking to gain a bit of revenge.

    He sounds rather paranoid, both in the unsubstantiated fears for his safety and in making claims about improper behaviour that he himself admits are unsubstantiated. Failing his ‘smell test’ does not equal improper practice.

    I hope he recovers his pride and well-being, and his allegations should be investigated, but as regards Olympus seemingly it’s best off rid.

    • MK

      i agree with you but you ignore the claim that “There were $800 million in payments to buy companies making face cream and Tupperware.” of course there is no point arguing here anonymously… just look at the stock price to see whether investors are concerned with the situation.

  • The way W. discloses these details is extremely harming to the company’s stock price. His behaviour is more damaging than helping and he must know this, so it’s intentional. Even if there is a lot that needs to be changed in Olympus, you don’t go about and spill the beans like that to drive down the shares. For that, W. is a moron.

    • tofino

      He didn’t make any public comments until after he was fired. If what he say is true, then it wouldn’t matter how he said it–unless he decided to keep quiet about wrongdoing. He also could be personally liable if he kept quiet about things and it later came out that he was aware of them while he was CEO.

      • digifan

        Sorry but that’s just utter nonsense.
        Tobias W. is right. I see this as a revenge act too, all he does is speculate with no proof. Exactly that is what breaks the economy.
        Let him proof it else he’d better keep quiet. If he wanted to his revenge he should have picked on something that only was harmful to the new CEO with whom he was in disagreement.
        Now he could take down the whole business.
        I say what an egoistic sob this Woodford,

        • WT21

          Hi last comment about “fearing for his safety” shows an irrational side here, too, so his comments should be taken with a grain of salt, I think.

          • admin

            Yes, that part sounds a bit strange.

            • See my comment in another post.

            • Chez Wimpy

              >Yes, that part sounds a bit strange.

              Only if you aren’t aware of Japanese history. There is (yakuza) precedence for “accidents” happening to whistle-blowers. Specifically the initial Sumo bout fixing scandal…
              “In 1996 two former wrestlers about to go public with evidence died of a rare respiratory illness within hours of each other”
              which took another 14 years before the truth about Yakuza involvement in Sumo – and then the bout fixing itself – came to light. Huge scandal, but here the stakes ($$$) are much, much higher.

          • lnqe-M.

            Maybe, Mr.W. is syco and pranoid, so maybe he need help.? ;-)

          • Well, when you disclose that a public company wastes lots of money, making deals not in interest of its stockholders, the inevitable question pops up: in whose interests was the management acting?

            Now consider that we are talking here about almost a billion of $$$. Not some millions – $800Mln – which changed hands for no good reason.

            Anybody, possessing the insider information AND being just kicked out, would be “fearing for his safety.”

            • Joel

              Correct when talking that sum of money, whistle blowers are not paranoid for fearing for their safety…

              digifan how is he taking down the whole business? if anything all he will do is take down the people he believes to be corrupt, if they went the share price would recover..

              And watch the news and read the news reports, he does claim to have proof and has provided it to the relevant authorities.. He even said he welcomes them to sue him in England as he would provide the reports as evidence and I guess they would become public records then?

        • He’s still a member of the board. As I note elsewhere, he still has a fiduciary responsibility to shareholders, but the rest of the board is meeting and deciding without his input. We’ve had examples of the same thing happening in the US. Most noticeably the crazy things that happened on the HP board not too long ago. One thing I learned from that (which apparently Olympus didn’t) is that you have to completely remove board members you want to shut out.

          • Correction: it appears that Olympus’ board can’t directly remove him as a director: they have to put that through a process that includes some sort of shareholder notice.

    • And if he sincerely believes there’s a real problem at Olympus and he truly believes it needs to be fixed? If true, that would mean he has far more integrity than the board.

      There is a small matter of money: well over a billion dollars worth in the past few years, and maybe even far more. It’s not just face cream and Tupperware. Olympus has bought a strange mix of things recently, including a chain of cell phone stores. Some believe they’ve overpaid for almost everything they’ve acquired this decade, even things that looked like they belonged at Olympus.

      Something is very amiss here, and it hasn’t yet come out. In Japanese society, things like Woodford is implying are kept under the table until it can no longer be denied, at which point there will be mass resignations and more. I suspect his English sensibility is offended by that, and he’s trying to get it out from under the table.

      Simply put, we are now to the point where there are two very opposing stories on the table: Kikukawa’s and Woodford’s. Both stories changed in the last couple of weeks, which certainly means there was a confrontation about something. The simplest explanation is that Woodford found something he didn’t understand/like and confronted Kikukawa about it. The response was that Kikukawa immediately kicked Woodford out and covered it up with the “societal differences” excuse the Japanese are so fond of.

      To me the questions are: (1) what did Woodford think he found, and (2) was Woodford right? We don’t know the answer to #1, but the shareholders believe that the answer to #2 is yes, and there’s plenty of previous “strange dealings” to support that.

      The sad part of this is that I doubt that any of this has to do with the problems in the camera division (other than perhaps not having the money to invest in it). The camera division’s issues are mostly executional, and can be remedied with time, money, and good decisionmaking. As I’ve written many times, Olympus has the engineering talent and they have the production capability. I’ve read several of their internal design and “future” documents, and it shows that someone there understands the issues. Which is why I’ve been saying for some time it’s a management and execution issue.

      • bilgy_no1

        “The sad part of this is that I doubt that any of this has to do with the problems in the camera division (other than perhaps not having the money to invest in it). The camera division’s issues are mostly executional, and can be remedied with time, money, and good decisionmaking. As I’ve written many times, Olympus has the engineering talent and they have the production capability. I’ve read several of their internal design and “future” documents, and it shows that someone there understands the issues. Which is why I’ve been saying for some time it’s a management and execution issue.”

        Exactly what I was thinking. Most of the trouble relates to the Biomedical business, which is far bigger than cameras. However, the camera division, focusing on the PEN range and higher end compact (XZ-1), could probably do a lot better. They are inhibited by corporate procedures.

        Like I wrote earlier: spin out or sell the camera division, and make sure that entrepreneurial people with a vision on consumer imaging in the 21st Century have some room.

        Also, it’s been shown in several instances that Olympus has good design and ideas, but that the project management is not so tight. E.g. the E-P1 was an unfinished E-P2 that had to be rushed out for the June 2009 release (otherwise Olympus would have lost to Panasonic). That’s what I think about when you mention an ‘execution issue’.

        • Not exactly. The skinny on Olympus is this:

          * Biomedical is doing well, but Olympus isn’t being aggressive on taking advantage of leadership position in things like endoscopes (i.e. could make more profit)
          * Cameras are dismal and a source of monetary loss in the company
          * Something is fishy about all the acquisitions Olympus keeps doing

          Investors had been mostly bullish on the first point since Woodford took over, hopeful on the second, not sure what to make of the third.

          • Jim

            Just think how good oly could make their cameras if that loose $800,000,000 was invested in m4/3 kit…. if only people threw straight dice… ha ha, I can keep dreaming!

      • +1

  • Deep Throat

    Mr W wanted to close the consumer business and tried to get the person out off the way that would stop that happening , the digging up off the Gyrus sale goes back to Mr W UK medical days he did not approve off the take over off another UK medical company when he would prefer more investment in the company he founded Keymed which is now owned by Olympus , even imaging products produced under Keymed has not supported the consumer division with the high speed cameras produced for industry out off Keymed using the nikon f mount rather than supporting the systems developed in Tokyo

  • Bu

    Now if only the price of the EP3, the 12mm f2.0 and other cameras/lenses would also drop 23% a few of us could get a bargain or two!

  • WT21

    A stock drop doesn’t mean the market believes Woolford, but the market doesn’t like instability and accusations.

    • True. Except there have been rumors boiling around Olympus’ strange dealings for five years now. The problem is that Woodford’s comments actually start to make those rumors look like they were actually real. If so, it means that Olympus has pissed away more than a billion dollars, maybe even more than two billion dollars recently. Stockholders don’t like that, either ;~).

      • > If so, it means that Olympus has pissed away more than a billion dollars, maybe even more than two billion dollars recently.

        But isn’t Oly, like a publicly traded company, obliged to announce the deals publicly?

        N.B. Actually, “pissing away money” in corporate speak is often synonym of “rats deserting sinking ship.” Could it be that some managers (or stockholders?) are preparing to sink the Olympus?

        • Olympus claims they’ve disclosed everything. What we’re starting to hear in the details is that, sure, they disclosed some numbers, but they never explained them, and they look mighty suspicious. You don’t buy US$800 million worth of companies that have little sales and no assets and no apparent connection with your business and then write the acquisition off shortly thereafter (you’d have to have connected all the footnotes in filings to even be aware of that, by the way). You don’t pay 35% more on a key acquisition to some unknown and no longer identifiable company in the Cayman Islands to help with the transaction. Merger advisory fees typically run 1 to 5%.

          Olympus is trying to paper over all these dealings. Why, no one knows. Facta made the assertion about anti-social groups being involved, which has to raise eyebrows. The bottom line is someone pocketed a lot of money that Olympus paid above and beyond what they should have. Who that really is, why they got that money, where it is now, seems to be being glossed over. One can only hope that Japan’s SEC equivalent steps in and really investigates what happened.

          • @Thom Hogan
            “According to an Olympus investor, who wishes to remain anonymous, Hisashi Mori, executive vice-president at Olympus, said: “He (Mr Woodford) has disclosed information that a director should not be revealing and it’s a very serious problem for the management of the company.
            Mori has claimed that the amount paid, which included cash and options, was less than half the amount claimed by Mr Woodford. Mori nonetheless conceded that the fee was high, while he declined to give an exact figure”

            so less than 17% and we don’t know what percentage was cash as the options may have never been paid out or a reduced rate…

            • I’m sure we’re going to see more back and forth on this. But that statement doesn’t actually tell us anything useful. It’s anonymous hearsay. It doesn’t actually claim a real payment amount (the actual amount should be public record, by the way–Olympus should have had to disclose it in their stock filings). It says nothing about who the money was paid to. It doesn’t tell us what services were obtained for the money.

    • Jim

      Stock drop – 23%…. thats not £50!

      thats more than instability and accusations!

  • bilgy_no1

    “No matter who is right, the market believes in Mr. Woodford story. Goldman Sachs Group Inc., JPMorgan Chase & Co. and Nomura Holdings Inc. cut Olympus’s ratings after the ouster. Something has to change inside Olympus, because many out there are not trusting them anymore!”

    Of course the market believes Mr. Woodford. He was promoted to CEO only two weeks ago, after having been promoted to COO earlier this year. Any ‘cultural adaptation’ problems would have shown in the previous period, not just in the last two weeks. Very clear that it’s just a smokescreen.

    If I were an analyst, I’d see this whole development as a serious sign that the Board is either unwilling to make necessary changes for the good of the company; or, even if there is fault with Woodford, a sign of extremely poor judgement of the Board in selecting the CEO (someone they’ve known and followed for years!).

    The way that Woodford has been sent off, as well as his reaction to the whole thing going public with dirt, is very unorthodox. Definitely a sign that there’s something seriously wrong.

  • David

    Digifan + tobias
    Actually tofino is right. If he is aware of material corporate malfeasance he has a legal obligation to make it public. Ideally this is done through reporting, but since they fired him he had to spill the beans. I agree there might be a little revenge going on as well, but only in the WAY he delivered the message, not in its substance, and it is the substance that is harming the company, not its delivery.

    • digifan

      If he’s “tolling the bell” than he’d better substantiate his words with proof. Not a quick denigrating sneer mentioning buying tupperware (irrelevant businesses to Olymus) companies etc.
      If something is wrong in a company you work for than you think of the consequenses of your actions. Woodford certainly didn’t do that.

      • tub33

        If someone at your company is committing a crime you report it to your boss. If they don’t do anything then you have to report it to the police. If you don’t then you are now an accessory to the crime because you know about it and you can go to prison as well.

        Remember all the Enron accounting scandals? The Sarbanes-Oxley law requires that the CEO and CFO sign off on the financial results. If something strange comes up later they can go to prison. Even though it is a US law the CEO was British and a lot of British companies have stock traded on US exchanges so they tend to comply with Sarbanes-Oxley anyway.

      • tofino

        He didn’t go public until he no longer worked for the company, so it is unclear what you mean by your statement that “If something is wrong in a company you work for then you think of the consequences of your actions.”

        If you found evidence of malfeasance what would you do–keep it quiet?

        I believe it may also be the case that Oly could sue him if his charges are unfounded. I doubt he would be making his allegations without being able to back them up.

        • flash

          So far Woodford has not stated that there is corporate malfeasance or criminal acts. He is just doing it by inundation. As such it is hard to sue him, Tupperware Brands Corporation might be able to as he used their trademark name, saying they were bought out. That and the other comment that he was told to take a bus seems to me he lacks the maturity to hold the position. Creams and Plastic Containers are a part of the Medical Supply Industry, so it might not be as strange a purchase as it is described to be.

          If he has any knowledge or criminal activity he is should bring it forward, which he has at least in public not done; he maybe planning or have done it to do it to the proper authorities. I do not know if that can be keep confidential in Japan.

          He contracted a independent report by an Accounting Firm to look in to this. If an Auditing firm is hired with out the approval of the Audit Committee one will get in trouble in most Companies; he was not even the CEO at the time. Then he asked his boss to resign, yea that is bright. Now if the Chairman resigned and there was criminal activity Woodfield would keep quite and be a co conspirator after the fact. I think Woodfield needs a good criminal lawyer, not a corporate hack.

          As far a the Chair goes he made at least some bad decisions in aquisisions and running the company in general. So in my opinion he should also leave.

          • > That and the other comment that he was told to take a bus seems to me he lacks the maturity to hold the position.

            He very likely can’t be more concrete without disclosing confidential information.

            > If he has any knowledge or criminal activity he is should bring it forward, which he has at least in public not done

            In one interview he mentioned that the same materials he provided to the press were also sent to the police.

            MR.W worked ~30 years in Oly: I’m pretty sure he knows what he is doing.

  • Brod1er

    I would prefer some product rumors/reviews. There are plenty of alternatives:
    Panny 14-42 X review
    (unbiased) SLRmagic 12mm review
    Panny & Oly “pro” body rumors
    Panny 14-35, 35-100 specs
    Voigtlander’s next lens?

    Admin, Any info appreciated. Thanks!

    • Don’t forget the next Panasonic EVF

    • What about a premium m43 camera with built-in EVF and swivel LCD from Oly? Or at the very least updates on GH3 or GX1?

      Otherwise, if rumor mill is too thin to report anything, the Oly’s corporate scandals do provide some entertainment value.

    • Esa Tuunanen

      > Panny & Oly “pro” body rumors
      It just starts to look like that moneys which Olympus should have used for expanding m4/3 product range into full system for competing Canikon/Sony might have gone somewhere else in somewhat shady circumstances…
      I’ve found it odd how after slowish start to DSLRs Olympus kept developing, or actually releasing products for 4/3 or E-system at rather good speed until early 2009 and then stopped it:
      But instead of expanding half year earlier announced mirrorless m4/3 system to cover E-system’s markets, and their existing customers, development has been only crawling forward with reiterations of one camera.

  • Frederic Hew

    Well, Olympus’ original press statement was unusually blunt and harmful to Woodfords reputation, and his interviews to FT are unusually blunt and harmful to the company.

    I think it was clear to both sides involved this is going to develop into an ugly conflict. It appears both sides will have to resort to legal action – we have not heard the last word yet.

    This clearly has nothing to do with adapting to Japanese corporate culture. Woodford has been working for Olympus for a while and as Olympus UK’s CEO was reporting directly to the Japanese board of directors.

    • flash

      Dismissal statements have to be blunt, to avoid being sued. Companies do not like to be sued even if the suit is mostly frivolous.

      • Frederic Hew

        No… this is what internal records or, when possible, signed agreements that remain undisclosed are for.

        Most of the time, when a top executive has to leave it is publicly portrayed as a resignation. The company will then issue a statement thanking the him for his contribution, wishing him success, and stating its expectations from his successor.

        This is common business practice. Exceptions to this rule mean big trouble.

        • Esa Tuunanen

          And even in cases when executive in question has done decisions affecting badly to company’s financial result they’re hardly ever kicked out in this kind fashion of just suddenly shooting them out from gun’s barrel.

  • DingieM

    The vultures JPMorgan and Goldman Sucks adviced this? Wow of course, they highly probably are shorting Olympus thus they make a load of money from downward Olympus.

    This is THE problem of the world stock markets: The Banks

    • flash

      You might be right. The market makes money when stocks go up and when they go down. Speculation is very profitable for brokerage house. That is even with out direct participation by the house in short sells and purchases. IMHO the markets need some real reform.

  • David


    Read the Bloomberg article. It lays out the basic facts Woodford was concerned with. Now there was probably a more politic way this information could have been released to investors and regulatory bodies, but prices would still have plunged.

    • Woodford has apparently now given documents to at least three press organizations. This isn’t going to quiet down quickly.

      • Stu5

        Much worse than that now. He has handed it over to the police as well. That came out in the CH4 interview.

  • George

    as i wrote probably 1000s times i am writing again

    • Michael Meissner

      Funny, I just bought an E-5 today (to add to my existing E-3). Now whether there ever will be anything new in the 4/3rds space (which I doubt), or even if the whole Olympus camera division goes away tomorrow, I’m sure that my current cameras will last me quite some time. For that matter, I took my nearly 10 year old C-2100UZ shooting this last weekend along with my 6 year old E-1.

  • The master

    The way Olympus slopped together the EP1 and kit zoom, back in the begining, told me all I needed to know and I moved on.

  • Mr.NoFlash

    I believe now, there is a problem with Olympus, which has nothing to do with the camera business oder the medical equipment engineering.
    I think to speak about the problems is good for all parts of Olympus in the long term, because probably only this way the problems can be solved, even if the stock price drops currently.
    I just hope the problems can be solved before people dont buy anymore from such a company, and I have the hope this will be.
    Obviously Olympus survived the “money throw out”, but what has to be fixed is that such things can never happen again .

  • Kiri

    Truth is that no one really knows the facts except for those involved. So I really don’t know how you can pass judgement on Woodford either way.
    Perhaps he is just seeking revenge. But judging by the way he was dismissed, can you blame him?
    It seems like Olympus handled the situation very badly, and now that is coming back to bite them in the ass. Perhaps it serves them right.
    The statement they released was condescending and humiliating at best. And completely unnecessarily so. It sounds like they are just getting to reap what they sow.

  • flash

    Woodford went after the king Kikukawa. Remember if you go after the King and do not kill him (figuratively)you will be taken out. Kikukawa is one tough 70 year old, as most war children are; I am surprised that Woodford was not literally taken out, so maybe there is only mostly smoke there. Nothing changes in human relationships. By the way cream and plastic containers are very important in the Medical Goods field; so the jury is still out whether they how good the purchases were. I personally do not like that companies buy and merge with each other, but that was what has been going on in Japan a lot over the last 15 years, sort of like the US in the 70s.

    Once again we have a camera division in trouble for what happens else where in the company. But other then Samsung and Nikon all the companies in the mirror-less camera business are not doing all that great.

    The company needs to get some new leadership in place soon, as Kikukawa is 70 it will happen. Still want to see last quarters financial report.

  • reverse stream swimmer

    Year 2011:
    • The March tsunami in Japan
    • The October flooding at camera factories in Thailand
    • The October turmoil at the Olympus board.

    Certainly a hectic year for the Japanese camera industry.

    Just hope we don’t see a hostile takeover bid, or a mafia sinking the company.

  • GreyOwl

    No smoke without fire, as we say in the UK.

    • flash

      Yes, but there are Fog Machines.

  • Rocky

    Take your camera out and get out there and shoot…It’s still working isn’t it?

  • Jon

    Woodford is a little chicken snitch. I hope Olympus send the Yakuza to teach him a lesson.

  • Boooo!

    No E-50 and E-7 then, huh?

  • timx

    Maybe Mr. W’s concern of his own safety isn’t unfounded. Maybe those mysterious advisory companies have something to do with Japanese gangs?

  • Norm

    If the allegations are true, Woodford should be viewed as a hero for what he has done. It takes real guts to go against a board over their prior bad decisions. It would have been so much easier for him to look the other way and do nothing. Woodford had a responsibility to the share holders to resolve this issue. He did his job as should be expected and I would want him on any management team.

    As for going public with this information after being fired, there is a reason why whistle blowers are afforded protection in the United States. If someone inside a company brings criminal activity to light, they need to be protected for the public good. If the allegations are true, then the share holders will ultimately benefit from the potentially criminal acts of the board being revealed and cleaned up. The fact that Woodford got fired before he could get the answers to his inquires is just another example why whistle blower laws should be made universal world wide. I doubt these laws exist in Japan business where conformity is held in higher regard than truth.

    The fact that the board fired him brings even more suspicion on the board. If everything was done properly, then why would the board not make all of the records available? Publicly traded companies need to be transparent. At best the board is guilty of horrible management. At worst, they are guilty of a criminal act. The Japanese equivalent of the SEC definitely should investigate. I wouldn’t be surprised if events unfold that the Olympus board will be forced to resign over this. Some of them may even land in jail.

    The Olympus fanboys on this site need to stop confusing the cameras with the company. Just because they make great cameras and lenses does not mean that the company is well run or doesn’t have criminals on the board. I want Olympus to succeed as much as everyone else, but the top management needs to be held accountable for its mistakes.

  • Finally I got a chance to read Bloomberg’s article in full.

    Frustrating account. That’s no way to run a public company. Stockholders should sue the board.

    (It would be interesting to see who owns how much of Olympus. It could also be that the majority stockholders (or their proxies) are themselves involved.)

  • From Inside

    From the US side, something was very fishy about Woodford’s acceptance as President and then CEO of Olympus Worldwide. His style never matched up to the Japanese Culture. He has a bully style of Manangement and the Japanese have an Ultra Conservative Style. To change Olympus internally, would not take 8 months, but years. The US was stuck with the worst CEO on the planet and Woodward axed him immediately, which is what the Japanese wanted to do while saving face. Woodford made that happen, but perhaps his loose lips to the Media did not set well with Olympus leadership. Everyone in US Management could not figure why the decision was made to purchase Gyrus / AMCI for such a huge premium. Through US Internal Strategies, Gyrus could have easily be taken down for much less than 2.2B. The Consumer Division in the US was destroyed by US CEO Gumz, who was totally out of touch with the realities of consumer marketing. He used Millions of Marketing dollars to promote the local US Open Tennis tournament. A lot of money focused on a few versus the masses. He did have great seats though.

    Woodford broke all the rules when he went after the one that gave him his shot. I like what happened to him, but agree that Olympus needs to restructure the top, versus changing back and forth from US managing US operations to the Brits managing US operations. Get a good US CEO and let the US focus on the US…where a major portion of the profits come from. Everyone is confused. Be interesting to see who AXEM really is and I am sure the Media will let us know very soon.

  • omolympus

    The Board of Directors will try and maintain their
    positions for as long as possible, thereby affording
    more time to manipulate their parting stance – or
    shall we say: at least make their exit as “clean” as possible.

    However, share price is driven by perception. And for that simple reason
    a change at the top must occur sooner-than-later. If it doesn’t, the company’s capital value will disappear.

  • From Inside

    omolympus……..agree 100%

  • flash

    In the US most whistle blower complaints are not really true, and are a costly to defend against. Even when successful you loose your reputation and the funds it took to mount a defense. It is also against the principle that you have the right to know your accuser, that most enlighten governments have. With out knowing your accuser of a crime you are generally in a tyrannical regime and have no individual rights. The US and its states mostly have sever restrictions on what can be brought by way of whistle blowers, it is not blanket.

    Its now been reported that he had a meeting with the U.K. Serious Fraud Office, the the transaction accrued in the UK. Woodford is again quoted as not alleging fraud and stating the authorities have all the evidence. The SFO is a good bunch, I can’t think of anyone more capable to sort all this out; but it will take them some time no matter what is there. Either there is fraud (which requires malicious intent) or not. Being stupid is not a crime.

    I do think maybe the board should resign for the poor transactions and the promotion of Woodford.

    The problem then is who to take over. In Japan I believe it is an inside board of directors, so that may be a big problem if all the top of the company vacates.

  • flash
  • Akshay
  • tofino

    Woodford interviewed on London’s Channel 4 News.

  • Olympius

    After watching Woodford on Channel 4, I have to say he is completely credible, and has all his ducks in a row, especially with the PriceWaterhouseCooper report to back him up.

    Olympus is finished as a corporate entity. Even if they somehow manage to evade Japanese authorities, they are going to be punished severely in the marketplace, as is already happening. Their credibility, which was never rock solid to begin with, is now damaged beyond repair.

    There are a lot of good people at Olympus who are going to be hurt by this, and my heart goes out to them. A prime example of how cooperate greed and bad management has caused undo harm. I would not be the least surprised to see the mass exit from Olympus stock be replicated by an exodus from Olympus products in general, especially where there are competitors to choose from. As this story become more widely circulated, which it will, Olympus is really going to suffer. There going to need a lot more than a great 45mm lens to get through this, and I predict they will not survive.

    This scandal is especially troublesome as Woodford was doing some excellent work for them, and their stock price was outperforming the broader Japanese market thanks to his efforts.

    It seems we might be on the verge of the Japanese version of Enron.

    – Olympius

    • Woodford has stated that he doesn’t believe anyone at Olympus personally benefited financially and he is not certain that fraud even took place….
      Also the 58% premium paid for Gyrus in 2008 seems reasonable considering last year the premium average paid in 2010 in the USA was 37% and this average percentage would of been higher in 2008.
      Also I seen the actual perecentage in fees wasn’t 35% but less than half ie less than 17% and it wasn’t all paid in cash some percentage of that smaller figure was in some form of options.

      google “Olympus Corporation and Gyrus Group PLC”

      • BS Artiste

        There is a difference between fraud and merely bad business investments. Right now, we don’t know which one has occurred.

  • BS Artiste

    If Woodford is lying, he opens himself up to a defamation claim, especially in the UK in which the burden of proof is reversed compared to other common law jurisdictions around the world.

    Time will tell who is being honest and who is not. As a fiduciary to Olympus, Woodford had a duty to shareholders to expose corruption, no matter whose toes got stepped on.

    If Woodford is just rashly reacting with sour grapes, then the defamation claims against Woodford could be large for falsely accusing other Olympus board members of impropriety.

    On the other hand, if an audit of corporate activities identified fraud, then Woodford had a duty to shareholders to get those involved in the fraud to resign, regardless of Yakuza or no Yakuza. If Woodford could not get them to resign, then he was duty-bound to resign himself, escape for his personal safety, and raise the issues in the press.

    • BS Artiste

      At least in the U.S., under the Business Judgment Rule courts generally give boards of directors a wide sphere of freedom to operate including making business decisions that ultimately turn out to be unprofitable.

      However, fraud on shareholders such as transactions involving undisclosed conflicts of interests or outright manipulation of financial numbers are punished severely. In addition, shareholders normally can pursue derivative lawsuits against companies for fraud or conflicts of interest in transactions.

    • Bryan Brunton

      The best way for Olympus to lose the remainder of their market capitalization would be to file a defamation claim against an ex-CEO who is holding a damning report from Price Waterhouse.

  • Nic Walmsley

    Starting to feel like it might have been a bad time to get into m43. Sounds like the last three years at Olympus have been suboptimal. Pity because they seem very close to delivering me my perfect camera system, with assists from Panasonic.

  • faceman

    Olympus’ big mistake was hiring a snarky little foreigner like Woodford. He probably got all pissy because unlike the west, screw-ups like him don’t get big severance packages for making a mess of things. Instead of doing the respectful thing and resign quietly, he’s making a mess of the situation that may cost many hard working employees their job. Woodford is no hero, he’s just a little man who’s pouting over spilt milk.

  • CRB

    “Goldman Sachs Group Inc., JPMorgan Chase”….examples of honesty and integrity…LOL..LOL…and LOL again….

    • Yes, but in this particular case they had to downgrade Oly, because people started dumping the stocks.

      In the charts, look not only at the price of stocks, but also at the trade volumes (the chart at the bottom of the stock price chart).

      The trade volumes are highest in 5 years:

      That’s really simple. If demand is lower than supply, the stock price would fall. That would make net worth of the company smaller, meaning it can borrow less money. Too many traded stocks also mean that company becomes vulnerable to buy-out and thus its situation is volatile (since potential change of ownership spells no good in short term).

      Price-wise, Oly’s stocks definitely have seen worse times but never before stockholders were panicking like that.

  • MMMil

    Hahaha, I see many people who has never come here post messages supporting W. Don’t believe them, Japanese companies are very ethical and they do not fire someone without proper reason.

    They tried to save this traditional Japanese company from wall street. Do you know that 90% of more than 100 years old companies in the world are Japanese companies?

    • > Japanese companies are very ethical

      Another one fooled by their culture of humility. It is just how they act socially, it doesn’t cancel magically their human nature.

  • flash

    Channel 4 only asked him softball questions, but he did good; even wore the Olympus colors blue and white on his tie, anyone else see that? So far no audit of the company has shown fraud; it would be required to be stated. Fraud involves intent and surprisingly Financial Audits actually are not required to find it. Not rehiring their audit firm after the firm initially question the transaction, may or may not be significant. Some companies, I am not sure if it would not even required, do not rehire there audit firm perpetually.

    No way is it like Enron, that was a whole company based on fraud. Here at most we have a handful of transactions and individuals. Not even as bad as Lockheed in the 70s.

    As far as the imaging division surviving, the first quarter report stated the strong success of the Pen line and XZ-1 ; with dismal results of the compact line. I don’t think their is anymore real money in compacts for any real camera company, the rich have smartphones and the poor buy on price. Even if Olympus collapsed, which does not seem likely, more likely it will be a take over target if its share value gets to low. Who would but the imaging secton? JVC to finally make a lens that doesnt suck, Apple to hurt Samsung, Samsung to add prestige, or Google just to spend money; maybe the Japanese “four pillars” will set up a take over as they own a part already. It would not be Sony or Panasonic, they are not in the money right now. Nikon and Cannon have what they need. The second quarter results should be available soon, if not already.

    I expect financially the Image Division to do very well. The problem last fiscal year was the compacts, and the change over in the Pen line. The real problem with the Imaging division, which I read on a blog, but makes a lot of sense, is the one successful product line the Pen. If it fails then what, well they need more to inavate , and Olympus is know for it, they do so by design in reinvesting about 8 percent in R and D.

    As far as the market share (I would not suggest buying now) it went down mostly because market financial analysts like to bet on the Jockey not the Horse. If they ran Corporation World all stocks would soon be vj (bankrupted); never plan, never invest in the future just worry about 1 or 2 years out is their mantra. Olympus stock value will begin to improve once there is some resolution to these transaction (while not financial insignificant, not that critical to the success) and many new board and management Olympus stock should start to improve.

    Also look what Olympus did to a past real whistle blower||09/21/2011%205:54%20AM%20ET||headline||AP%20Interview%3A%20Japan%20whistleblower%20at%20highest%20court||docSource||AP%20Online||provider||ACQUIREMEDIA||realtedsyms|||US%3BOCPNY&ticker=7733:JP make Hamada Chairman; that will show them. It is interesting that Woody was the one that told the Olympus lawyers to appeal the ruling against Olympus for the poultry 29,000 dollars.


    From the third post.

    Does anyone realise he is still with the company? Some of you are sounding like he has been bitterly ousted. He is the Director of the company, just a step down from CEO.

    • flash

      My understanding the board did not have the power to remove him from the board. I wonder how much stock he has, and other types of compensation from his prior company. Well as I stated before the Woody that Hatched man got axed. What goes around comes around.

  • flash

    Here is the letter that Woody sent asking for the resignation of the Chairman. It discuss it seems the Price Waterhouse Coopers report he commissioned.

    I find his language in the first paragraph especially “outcome of my review into the serious corporate governance concerns”. In my view it shows he conducted the review with a predefined result. If he telegraph these feelings to the public audit firm he hired to conduct their result would of been expected. After all you are suppose to make the customer happy. In the past, depending on the firm you hired you could more or less depend on their conclusion.

    The letter looks damaging, but it also seems to be throw as much up to see what sticks kind of document. I find some of the conclusions in Woody’s letter are Prima facie wrong, which puts questions on the parts of the letter I am not familiar with.

    None of the issues should dramatically effect the Financial Health of Olympus long term, that is not saying that it will not damage it, but Olympus will continue to be traded on the market and survive this episode. I expect the “Four Pillars” of Japan will have the real say of what happens to some of the board members; not some court in Britain or anywhere. I would not want to be them.

  • Loosing 18% on friday, another 6% on monday and today tuesday 9%,
    that’s a free fall of the Olympus stock:

    This isn’t a nice outcome, There’s something rotten in Denmark

  • Droboe

    Does anyone know how many millions Woodford was being compensated as CEO of Olympus?

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