Olympus Continues its Fall

The Olympus debacle, as I noted last month (see original posts here and here), seemed at first like an interesting culture clash between its former chief executive (a Briton with 30 years' experience with Olympus) and a nearly 100-year-old Japanese company.

Now it's starting to look like "one of the biggest accounting fraud cases in corporate history," according to a Hiroko Tabuchi article in today's New York Times.

The evolving story had centered on one particular acquisition -- of British medical equipment manufacturer Gyrus in 2008 -- and specifically on shockingly high fees ($687 million on a $1.9 billion deal) that were paid to two heretofore-obscure Japanese bankers for "advising" Olympus on the deal. Olympus denied that anything improper had been done.

In a stunning reversal, the company yesterday admitted that "money for mergers had in fact been used to mask heavy losses on investments racked up since about 1990." (emphasis added)

Olympus' current chairman, Shuichi Takayama, acknowledged "inappropriate dealings" but would not admit to outright fraud.