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Rotten management, dodgy dealing and mafia style loyalty. Welcome to Olympus.”While we think we have an explanation of what happened, we can’t say we have the specifics on everything.”

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That’s what a six person panel appointed by the Olympus board last month, to investigate the corporate hi-jinks have deliberated, this week.

The panel also warned senior management will be “pursued” for their wrongdoing, reports the Wall Street Journal, and has found the company hid up to $1.5bn of losses.

The embezzlement was done on company deals performed between the late 1990s and 2008, where over $1 billion also “disappeared” to mystery financial advisory companies following several acquisitions.

“The legal responsibility of those who were involved must be pursued,” the panel warned a press briefing held Tuesday.

One of the giant’s internal auditors, Hideo Yamada, and former Vice President Hisashi Mor, were identified as key players in the financial irregularities which led to British CEO, Michael Woodford’s sacking, after he questioned several of the murky transactions.

“The core part of the management was rotten, and that contaminated other parts around it,” the 200-page report states.

It also heaped heavy criticism on Japan’s tight lipped corporate culture, branding “the situation” as “an epitome of the salaryman mentality in a bad sense.”

However, suspected links with the Japanese underworld were absent, the report also found.

But it wasn’t just inside bosses that did wrong, external auditors also did not function “correctly.”

The messy affair, which has all the elements of a Hollywood blockbuster with mafia, intrigue, hiring and firing of CEOs all part of the scandal which has rocked the Japanese giant, tarnished its corporate reputation and chopped its market value in half. 

The company also risks being delisted from the Tokyo stock exchange.

Both Ernst & Young and KMPG auditing firms deny any wrongdoing and say all regulatory accounting practices were obeyed.

 

“The company takes very seriously the results of the (panel’s) investigation and its recommendations, and it is considering further fundamental measures to restore confidence as soon as possible,” Olympus said following Tuesday’s panel briefing.

It now has until December 14 deadline to report its second-quarter results and reveal the restatement required to remedy its accounts.

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