Michael Woodford and Tsuyoshi Kikukawa
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I was happy that the Olympus manager fraud story was over…but in reality it isn’t! BBC reports that “Olympus and its UK subsidiary Gyrus Group will be prosecuted by the UK’s Serious Fraud Office.”
Olympus answered that:
“it is difficult to predict the outcome of this matter or estimate the level of fines that may be imposed on the company and Gyrus Group Limited, the potential financial impact of this prosecution on Olympus group’s business is unclear”.
I really hope the prosecution will not have consequences for the company and their effort to write Black Numbers again!
78 Responses
What was a blight for Olympus has turned into a melanoma!…..People make mistakes. Some people representing corporations make huge mistakes and sometimes those mistakes just won’t leave you alone.
I love using Olympus products but ultimately that has nothing to do with what a few corrupt individuals done to ruin it for the rest of Olympus, so Let other corporation take heed that white collar crime isn’t on and it’s just a matter of time.
I hope Olympus with the latest ceo can work this out and help direct the company great things
Dear Admin.
next post please..
thanks
a 1.7billion dollar mistake inc purchase from Sony!
The only mistake Olympus made was hiring that dirty sneak and manipulator Michael Woodford. That guy needs to be arrested and sent to jail himself. He probably framed the whole board for his own gain.
And you should be arrested & jailed for being a complete moron.
And you need to go back to the Reichenbach Falls, professor. Fred is right about that money-grubbing shyster.
How do you know Woodford is innocent of any wrongdoing? Because he’s speaks english? Dumba$$.
Well, the manipulations started long before he had any say in that matter. So your comment is utter Bushi.
Quite. It all goes back years before he was even involved. A very stupid misinformed comment.
And thank you for confirming that you are a complete and utter moron.
Wow. Your comment is the height of stupidity.
The end justifies the means eh? You must not have been able to read what happened.
I agree : the ambitious Woodford didn’t get what he wanted and now is pursuing revenge goals. That is what succeeds when you hire sharks to manage an enterprise. I would like to know how much competence the UK tribunals have to pursue a foreign firm.. Probably not in what doesn’t concern the UK filial.. Who is the plaintiff ? That investment fund where Woodford has I influence ?
They gave too much money to Woodford : now he has too much free time to pursue his vengeance instead of looking for a job.
This is just trying to bother Olympus with a trial whatever the chances of a favorable outcome are for the plaintiffs, they don’t care, they just want to damage Olympus as much as they can.
They have a lot of competence. Mark Woodford has nothing to do with this now. This is the SFO going after them. This link might give you a better understanding of what is going on here in the UK:
http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/10285534/SFO-charges-Olympus-over-accounting-scandal.html
Typo Michael not Mark! Opps.
@stu5
“They have a lot of competence.” funny!
tbh this case is really too minor for the Seriously Flawed Office to be dealing with.
btw http://metro.co.uk/2013/07/17/sfo-boss-gave-out-1million-payoffs-then-quit-3885917/ same story was covered by the Daily Telegraph too… and http://www.mirror.co.uk/news/uk-news/serious-fraud-office-boss-phillippa-2058375
Did you read the article you linked : the case was denounced by Woodford :
“Mr Woodford brought the case to the SFO’s attention in 2011, shortly after being fired for raising questions. (…)
He said: “It is in the public domain that following my dismissal from Olympus in October 2011, on my return to London I immediately visited the SFO to advise them of my concerns and provided them with all the information in my possession.”
And your point is?… Again Michael Woodford has nothing to do with this now.
My point is that Woodford started it, so it is wrong to say that it has nothing to do with Woodford. It is the result of his revengeful mentality. He lost and then tried to harm Olympus in all possible ways.
Woodford did not start it the corrupt fraudsters on the Olympus board started it. Unless you work under the principal that someone reporting a crime is somehow responsible for it what a bunch of fanboy/girl nonsense
Olympus engineers, some of the best in the world
Olympus managers, corrupt, decrepit and dysfunctional
Break the link to corruption and see the company shine
makes you think about all the stupid things they have done an how bad it effected everything.
Olympus engineers best in the world? Come on. If that would be the case, they certainly would have designed better products, with better ergonomics (PENs), build-in viewfinders in the PEN series, with more understandable menus, non falling off eyecups, things that do not fall apart so quickly.
I still like my E-M5, but it is certainly the camera with most repairs and defects I ever owned. And some of the deficiencies are certainly not sample variations, but clearly engineering mistakes(eyecups, low resistant body colors, menu system).
Feels like the reflection of entire contemporary Japan!
Obviously, even British General Prosecutor wasn’t happy with lame video capabilities of E-M1.
LOL
HA
Oh, good one. I was thinking this would be a good post for Oly-bashing that actually makes sense. Jshaw6000 has a good one below, too.
Of course, I feel the same way I did about Polaroid and Kodak: always sad to see great traditions ruined by bad management.
Olympus Has Fallen.
lol Good, dam criminals.
It is quite unlikely the fine will be big enough to dent a company the size of Olympus… Lets be honest here, when we look at the average wrist slap for corps they really are nothing serious.
I could be wrong, but zzz bring on some rumors 😀
Correct. This will likely not affect the bottom line directly. The Japanese prosecution ended with a 7 million $ fine. The indirect affects might be worse.
Wouldn’t have happened had they included a hood with every lens.
lol the lens hood effect
Initially, I agreed with Michale Woodford thinking that those managers needed to be set straight, and there is certainly some truth to that. It seems though that one third of Japan functions in a similar fashion as Olympus, at least as far as I am able to judge on a superficial level. At first sight, Michael Woodford appears to be the holy warrior trying to save Japan with what he thinks are Western business norms. However, after reading his book I can’t help having the perception that he is an incredibly naive and self-serving individual who hasn’t grown up beyond age 6. The truth is likely somewhere in between. If one looks at the entire case one cannot help but feel for those brilliant engineers and designers at Olympus must have suffered enormously as a result of the financial loss and of Michael Woodford’s need for self-gratification. While Olympus’ business strategies were brought to public scrutiny and certainly were questionable, I wouldn’t really want to know about equivalent business secrets under Canon’s, Nikon’s, and Sony’s rugs. To me it seems more and more that Olympus made the mistake of hiring Michael Woodford, at least from a competitive perspective. This is not to say that anything Olympus did in their speculation cover-up was correct or that there wasn’t any value behind uncovering the perversion of modern-day Japanese business practices. Having said that one cannot help but remind Michael Woodford that he had moved to Japan. And even more so that a lot of Western corporations also operate at the borderline between black and white.
+
I am sorry but that’s ridiculous. Regardless of what you think of Michael, you are saying that wrong doing should go unpunished.
Yes – and now Mr. Woodford will face problems – because he was “officer” at the “parent Company” in 2009 and 2010. Read 501 and you will understand.
the purchase of UK company Gyrus for 5 times its turnover and 27 times EBITDA was done in 2008 and handled completely from Tokyo HQ .Not much of a surprise as they no doubt wanted control to remain in Japan with the board that’s what I would do if a billion dollar fraud was my objective
Well said. Plus if he had not done anything and it had been found out years later then he could have been charged as well. Cannot blame him for protecting himself and his family. What he did was totally correct. He went public after they tried to cover it up yet again.
How does the saying go? Oh yeah: “Don’t blame the messenger.”
Michael Woodford was officer, whistleblower, and messenger, and he did right. If you let a fraud persist, it simply begets more fraud. Fraud begets fraud.
Think about it. Every day, people trade Olympus stock, is another day where a seller defrauds a buyer. It’s a downward spiral — and eventually someone is left holding the bag. Even though it often hurts (short-term) to stop a fraud, you need to. Like medicine or exercise, sometimes it hurts.
So, don’t ever blame the whistleblower for the pain. Blame the fraudsters.
And as far as Japan being corrupt, I totally believe it — but not on the same scale as the UK and the USA. Just sayin’.
@occam
“but not on the same scale as the UK and the USA” you are joking, right?
I agree with your balanced view. I didn’t read the Wooford book, but followed all the story nearly and read all the Woodford press release and his statements concerning ths story and he is what you describe.
As a Japanese, I find it incredibly horrifying that there is so much corruption, almost at all levels of life. I expect the/any government to be corrupt but even some governments help their people.
What I expect of a company is that they would have the policies and procedures to not let internal fraud happen. Then, I thought back to those testifying about Enron. I also thought about the excesses at AIG after they received U.S. government money or where General Motors was claiming to have repaid the government everything when they hadn’t.
Have we all become so convinced that it’s okay to cheat and lie?
Japan full corruption ask tepco
Sorry, wenn Du Probleme hast, englische Texte zu lesen und zu verstehen, dann lass es bleiben. Die BBC bezieht sich auf eine Pressemitteilung von Olympus. Von “Olympus antwortet” kann keine Rede sein. Lies die Originalpressemitteilung und den in Frage stehenden Paragraph 501 des Gesetzes. Dann wird die Sache deutlich klarer, als diese Boulevard-Meldung der BBC.
Können Sie uns erklären, was die Unterschiede sind? Ich hab es gelesen, aber ich verstehe nicht was Sie meinen.
The practices at Olympus are endemic to the Japanese business culture, and dare I say, is a result of the immense pressures that flow from the “values” of “face”, and fierce defence of “reputation” and “honor”. Whilst these values do have tremendous positive aspects to the Japanese, and is what makes the Japanese unique in having such great pride and attention to detail in all that they do and produce, it obviously also has tremendous negative downside to many areas, including their business culture and practices.
Many would prefer harakiri (suicide) than to lose face or honor, mostly metaphorically speaking, but often literally as well especially at higher-level echelons of society.
This is a double-edged katana, and cuts deep both ways. Both strength and weakness at the same time, sad but true.
Just look at how Japan is handling the Fukushima nuclear crisis and you can see clearly how critically dangerous the negative downside is. I think if the Japanese are not able to uproot the negative practices that such values have in critical business and social aspects, it will ultimately lead to decay and a decline of the nation. We possibly see that happening already. I certainly hope not.
@Mel
Union carbide, Lehman brothers etc…
Get over yourselfs and let Olympus do what they do best and lets carry on making great cameras
Since nobody truly understand what happend (just wild guesses), it’s good to keep some decency in comments.
For us, photographers, we can just hope that justice will be done and that Olympus will continue to make great cameras and lenses.
well just look at the very corrupt BBC but we still glue to the screen every night because they make great television i think you get my drift
+1
Although a lot of their TV is garbage.
I am curious about what multi-billion Yen fraud the BBC has committed or by corrupt do you really mean they do not promote the same no doubt right of centre agenda as you.There is a major difference between individuals within a massive organization participating in illegal activity and said activity being a management devised and controlled policy.
@anonymous
BBC management : Jimmy Saville et al,Stuart Hall,excessive management golden hellos and goodbyes (way over what they were officially entitled to)”Detectives from Scotland Yard’s fraud squad are investigating senior members of the BBC’s leadership over allegations of misconduct in public”, Russell Brand/ Jonathon Ross…. http://en.wikipedia.org/wiki/BBC_controversies
You are confusing personal deviance’s with corporate policy , or perhaps you are suggesting that BBC management had a policy that a handful of its employees should commit sexual crimes.Though the payments that these executives were paid was indeed way over what they were worth it was in their contracts.The Russel Brand thing was a storm in a tea cup he is an attention seeking idiot.
nope I’m suggesting that management covered up for Jimmy Saville from day one right through to the Newsnight investigation.
“the payments that these BBC executives were paid was indeed way over what they were worth it was in their contracts” it’s not looking that way!
A few things.
1/ Olympus would probably have failed in the early 1990s after their losses on real estate, so it is likely that the cover up saved the company.
2/ It was a Japanese honour thing that led to the cover up and other than keeping themselves and their employees in jobs it does not look like any individuals gained.
3/ When Woodford spilled the beans the company was by then large enough and strong enough to survive.
4/ The SFO in the UK has a terrible record of duccessfully prosecuting companies and fines are relatively small.
5/ Olympus is not listed on the UK stock exchange so all that can be prosecuted is the Olympus distributors and any UK based company (in this case Gyrus).
6/ They are being prosecuted for giving false statements to auditors, something that many companies are found guilty of.
7/ Proving that a subsidary of a major corporation is in possession of all facts and deliberately misled auditors is not easy.
8/ If successfully prosecuted the fine is unlikely to be significant enough to damage a company the size of Olympus.
9/ There is no reputational damage when this is common knowledge and there is a book about the fraud in the public domain.
Thanks!
what you said 🙂
@Anonymous
That is the most intelligent comment I read on this topic. Thanks.
I agree with most of what you wrote, except the part where you claim no individuals benefitted.
As long as they were claiming salary, bonus and pension, the executives were benefitting from this fraud (as were staff, but they would have done so unknowingly). They also had the esteem of being at a perceived successful company, which they did not deserve, having overseen massive losses.
@Anonymus
Your comment is +++++
Oh yes! I’m afraid that’s the consequence of being an amoral, corrupt, awful excuse for a company. Anyone with a shred of morals would never touch an Olympus product out of principal, but camera nerds are a self centred bunch…
Damnit. Leave Olympus alone so they can continue to make cool cameras for us consumers!! Who gives a crap that they broke the law, I want more lenses, and DR, dammit!!!!
There is not a large company in existence that has not broken the law, whether it is employment law, accounting law, planning law, health and safety law or competition law.
I worked for a while for a union and they typically had 5,000 court cases against employers at any time.
You may have your own set of values over what are important laws and what are unimportant but it is hypocritical to make statements like yours when pretty much everything you buy will be from a ‘law breaker’
Thanks for the insight. I’ll take up moral ambiguity instead – anything’s better than being a hypocrite.
When we have a perfect world you will have moral absolutes. In the meantime….
…enjoy your Olympus camera.
I will, especially now that I don’t have to worry about moral absolutes or anything like that.
Ok, I will try to take it seriously.
It’s not the enjeneering staff that was corrupted, but the managers, who appear to be a completely different class of people (mostly linked to Yakuza, btw).
For this reason I will keep on buying Olympus products if I want / need them, but at the same time I really hope all those managers will have to pay for the wrongs they did.
To which I would add that 1) they will not pay anything, because they can’t be accused of anything in the UK, while in Japan they were (ignominously) acquitted; 2) it is true that Japan has its own “honor” code etc etc. (as I read above), but Olympus managers broke that code as well, although not seriously (lying to investors is a breaking of the code, dot); besides, Olympus competes in the world market, which makes the company a world company. Hence, if not legally, we can fully judge its missteps morally.
Good news for the Fanboys. LOL!!!
The links to the Yakuza were based on a comment by a journalist and there was no evidence for this at all.
Why would the Yakuza be interested in a company that had racked up massive losses in real estate and was in danger of going bankrupt?
The overpaying for companies was designed to get rid of the hidden accounting losses. If you have lost x billion yen a way to account for this is to pretend to over pay for a company and then make a loss on the acquisition.
This was done many years after the initial losses were incurred when the losses could be tolerated without bankrupting the company.
Though shareholders made partial and, for most, temporary losses, the employees and arguably the Japanses economy benefited by keeping a successful company going during terrible economic times in Japan.
Morally, in simple terms, they put the interests of the employees (which included themselves) before the interests of shareholders.
I know this is not a popular approach in the more capitalist parts of the world but many people would applaud those actions
who will prosecute the uk for its false flag mass murder of its citizens in the fascist false flag attacks on 7\7? f%&king with the japanese over this matter is nonsense, pure nonsense .
LOL!!! This forum never ceases to amaze me.. Good read with some tea and discuss with a few friends… Jokes will be tossed back and forth over this… LOL!!! Lol!!
Now I see. Mr allcaps and true homer is the same person. Wonder if he also is full frame. Wouldn’t be a surprice.
Full frame never uses punctuation and uses SMS-grammar. If it’s the same person, I’d be really impressed with the different personae.
Hmmm… This does deserve a more careful investigation. Of course, Admin can look up their IP address and let us know, but that wouldn’t be fun, would it?
Oly is dead , so is Nikon , current value of their stocks show that clearly.
@Derek
Olympus stock has been performing OK this year.