Panel urges legal action in damning Olympus report

TOKYO, (Reuters) – An independent panel issued a  damning report on a $1.7 billion accounting scandal at Japan’s  disgraced Olympus Corp yesterday, urging legal action against  “rotten” executives responsible for the cover-up and the  replacement of other board members.

The six-man panel found no link with organised crime,  however, an outcome that might help the 92-year-old maker of  cameras and endoscopes remain listed on the Tokyo stock exchange  and survive a scandal that ranks among Japan’s worst.

“The core part of management was rotten and the parts around  it were also contaminated by the rot,” the panel said in its  report, which was commissioned by the company and ran to more  than 200 pages. “In the worst possible sense, the situation was that of the  tribal culture of the Japanese salaryman,” it added, referring  to a culture of absolute corporate loyalty. The panel put the blame squarely on the executive management  and also criticised external auditors who signed off on the  books of the once venerable company. Olympus has lost about half its market value since  it fired British CEO Michael Woodford on Oct. 14 for querying  shady deals. Woodford promptly blew the whistle publicly to shed  light on murky accounting and expensive and questionable  acquisitions. Woodford, who is seeking shareholder and would-be investor  support to oust the board and return to his job, said he was  pleasantly surprised at how “explicitly condemning of the  existing board” the panel was.

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