Former Olympus CEO resigns as director, calls for “new and untainted board”

By Claire Reilly

Michael Woodford, the former CEO of Olympus Corporation who blew the whistle on a “shameful saga” of financial misdealings at the company, has also resigned from the board. Reuters reported today that the Briton quit the company’s board of directors and is calling for a meeting of shareholders to form a “new and untainted board of directors”.

“Let me make it explicitly clear: I am not walking away from Olympus,” said Woodford in a statement. “I would like nothing more than to return to Olympus and lead it towards achieving this status (of a world-class organisation).

“However, in the absence of a shareholder vote enabling me to do this, I am committed to ensuring that Olympus has the best possible opportunity to succeed going forward, starting with a new and untainted board of directors, and I believe my resignation is necessary in this context.

“Following my resignation, I intent to liaise with all interested stakeholders with a view to formulating a proposal for the constitution of a new board,” he said.

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The chain of events leading to today’s news began on 11 October, when the then CEO wrote to the chairman of the Olympus board, Tsuyoshi (Tom) Kikukawa, calling for his resignation (and the resignation of group president Hisashi Mori) following the acquisition of medical equipment brand Gyrus.

“In putting the company first, the honourable way forward would be for you and Mori-san to face the consequences of what has taken place, which is a shameful saga by any stretch of the imagination,” Woodford wrote.

“It is clear that the current situation is now untenable and to move forward positively the necessary course of action is for you both to tender your resignations from the Board.”

In a later interview with the Washington Post, Woodford said Olympus had paid “advising fees” of US $687 million to “unknown recipients in the Cayman Islands” during the Gyrus acquisition.

On 14 October, the board responded to Woodford’s letter by sacking the British CEO.

“We hoped that he could do things that would be difficult for a Japanese executive to do, but he was not able to understand that we needed to reflect the management style we have built up since the company was established 92 years ago, as well as Japanese culture,” said chairman Kikukawa.

Over the following days, Olympus stocks seriously suffered, with the company shedding 37 per cent of its value in just two days. Since news broke of Woodford’s departure in early October, the company’s value on the Tokyo stock exchange has more than halved.

Current.com.au has contacted Olympus for comment.

A graphy from the Tokyo Stock Exchange that shows the plummit in Olympus' value since this story broke in October.

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