Life at Olympus isn't just conjuring up stunning micro four thirds camera after stunning micro four thirds camera, it seems. Their British CEO Michael Woodford was fired last week for raising questions about billions of pounds that just "disappeared" out of Olympus' bank account.
Woodford was appointed CEO just two weeks before he was dismissed by the Olympus board, where he was the only executive out of 15 that didn't hail from Japan. As the story goes, reported in the Wall Street Journal, Woodford first became suspicious of the company's outgoings back in July, when he read in a magazine that his company had acquired three Japanese companies for almost $800 million at the time (£507 million by today's standards). They were, and still are, fairly off-base for Olympus: a face-cream company; a medical waste recycling company; and a company that makes microwaveable food containers.
By far the most unsettling purchase was that of Gyrus Group Ltd, which makes medical instruments. According to the magazine article Woodford held in his hands, Olympus purchased the company for 58 per cent more than its current stock price was at the time, back in 2008. A total of $1.92 billion, or £1.21 billion -- to a company that Woodford was not able to contact. So far, so suspicious.
When he asked his chairman Tsuyoshi Kikukawa about the acquisitions, he was reportedly told not to worry about it. Strike two on the suspicion chart. You can then begin to understand why Woodford decided to hire PricewaterhouseCoopers to investigate the books, and why he handed the 30 pages of findings to the Wall Street Journal to look into, too. To suddenly discover a bad smell at the company you helm must be a shocking thing to realise, but to be told "not to worry about it" is just a slap in the face.
After handing the report to the WSJ, which summarised that PricewaterhouseCoopers was "unable to confirm that there has been improper conduct," but that "it cannot be ruled out at this stage," he was fired by Kikukawa last week.
The official line given by Kikukawa appears to be down to a "conflict of interest" and managerial issues. Or perhaps it was because Woodford was causing too much trouble for Kikukawa, and sniffing too close to the truth?
Whatever the reason, Olympus' shares are at the lowest they've been in 2.5 years, and there's the threat of the Japanese Financial Services Agency to consider, too. While it'd be nice to stick our head in the clouds and make like this won't affect us customers -- and potential customers -- I think we can all agree that that money could've been better spent dropping the prices of their eye-wateringly expensive micro four thirds cameras instead. [Reuters, WSJ and The Telegraph]
Image Credit: BBC