TOKYO — Foreign shareholders in Japan’s scandal-hit Olympus have called for a rethink of new board appointments, saying creditor banks have exerted “undue influence” on the lineup.
In an open letter to the company, nine institutional investors, who collectively hold up to a 30% stake, said an “independent” chairman should be selected to head a board that would represent broad interests.
“To accept a bank-led rehabilitation would be a setback, in our view, to the interests of shareholders, as well as to the earnest efforts of the Japanese Financial Services Agency and the Tokyo Stock Exchange to improve corporate governance standards in Japan,” the institutions said.
“While shareholders and employees both have as their prime objective the growth and development of the company as an independent entity, creditors’ first concern is likely to be Olympus’s current balance sheet status,” it said.
The letter came as the company attempts to rebuild its reputation following a $1.7 billion cover-up scandal by present and former top executives.
The losses stem from bad investments made since the 1990s, which were brought starkly into focus by ousted CEO Michael Woodford.
Woodford went public with the matter to the international media after being sacked in October when he raised concerns over the losses, which were moved off the company’s balance sheet.
Olympus eventually admitted wrongdoing and several implicated executives were forced out.
However, despite support from foreign stakeholders, Woodford abandoned his campaign to get his job back, citing a lack of enthusiasm among Japanese institutional shareholders, who are traditionally unwilling to rock the corporate boat.
He has a Japanese-language book on the scandal due out in April.
Wednesday’s open letter came a month after the company nominated former Sumitomo Mitsui Banking Corp senior managing director Yasuyuki Kimoto as its next chairman of the board and former executive officer of the Bank of Tokyo-Mitsubishi UFJ Hideaki Fujizuka as a director.
The company also nominated serving Olympus executive Hiroyuki Sasa as the next president to replace incumbent Shuichi Takayama.
The medical equipment and camera maker has nominated a 11-member board for approval at an extraordinary shareholders meeting on April 20.
Olympus declined to comment on the letter, saying it was yet to receive it.
source: japantoday.com
