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Japan Watchdog Files Criminal Complaint against Olympus

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Source: Reuters

Japan’s securities watchdog said Tuesday that it was filing criminal complaints against medical equipment maker Olympus Corp as well as former executives and outside advisers over the company’s US$1.7-billion accounting fraud.

The Securities Exchange and Surveillance Commission (SESC) said it is requesting criminal charges be filed against individuals involved in dubious mergers and acquisitions used to hide losses in one of Japan’s biggest corporate scandals.

Kyodo news reported last month that the SESC and Tokyo prosecutors had apparently determined they could make a case against the company following the Tokyo Stock Exchange’s decision last month to keep the company listed.

Tokyo prosecutors and the metropolitan police last month arrested ex-chairman Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori, former auditor Hideo Yamada and former bankers advising Olympus, on suspicion of hiding huge investment losses through complex takeover deals.

Olympus has proposed a new board of directors as it tries to recover from the scandal, subject to approval at a shareholders’ meeting next month.

The scandal was exposed in October by Michael Woodford, who was sacked as chief executive by the Olympus board after querying the M&A deals.