Digital camera Company Olympus Australia, is facing considerable pressure from the fallout of the scandal now impacting their parent Company, after the ABC program AM, linked the scandal with the Japanese mafia. The drama unfolded earlier this month, when CEO Michael Woodford, a Brit, was suddenly sacked after he started questioning the $687 million payment to financial advisers following the acquisition of a European Company.
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Woodford is now described as a “man in hiding” after his shock sacking as CEO and President of Olympus ten days ago, describing the fee transactions as “extraordinary” which are now being linked to “antisocial forces” or Japanese mafia.
One payment for $700m – one third of the total value of the company being bought – was made to what is being described by the ousted Olympus boss as an ‘obscure financial advisor’.
Normally, advisors would receive just 1-2 percent of the total value of a transaction being overseen.
“I can’t understand how it could have happened unless sinister matters were involved,” Woodford declared.
Olympus has denied any wrong-doing over the fees claiming the figure paid to advisors was was less than half the $687 million figure claimed by the former boss.
The ousted chief executive also claimed the company’s review of the payments has not gone far enough and said he was fired because he asked questions about the extraordinary fees.
However, Olympus firmly deny this, claiming the British native Woodford failed to align himself with the Japanese business culture, despite turning the camera giant’s European operation around and being held up by its Chairman as a model CEO, just weeks earlier.
The apparently dodgy fee was paid for the Japanese camera maker’s acquisition of Gyrus Group PLC in 2008.
The former CEO now fears for his safety, and according to ABC AM radio programme, Woodford was told to “go catch a bus to the airport” by Olympus top management after he raised question about the extortionate payments for a series of acquisitions, which totalled around $1.3bn.
The ex Olympus boss also accused his former employer of dodging the controversy about the fee, in an interview with the AP this weekend, while the company insists external accountants and lawyers will engage in a full independent review of the transaction.
Woodford also claims Olympus was moving too slow on the issue.
“Why do you need a committee to say there’s $687 million for advice you can’t justify? Start with that before you move on,” he said.
“It’s deliberate tactics, just to push it away, get it out of the spotlight.”
“You need forensic accountants going in quickly, very quickly,” he added, who himself had commissioned an independent review of the extortionate fees, while at the helm.
However, the report, carried out by PriceWaterhouseCoopers, failed to come up with a conclusion on why fees were so high, finding another obscure advisory firm called AXES were paid a 5 percent fee for a deal of up to $2.5 billion.
Share prices have slumped following the controversy.
