Ex-Olympus boss guilty of cover-up

Former Olympus president Tsuyoshi Kikukawa has admitted guilt over a cover-up scandal of massive investment losses at the top Japanese camera and medical equipment company.

The scandal emerged last year when Michael Woodford, the British chief executive who turned whistleblower, raised questions about payments for financial advice and dubious acquisitions. Mr Woodford was then sacked.

Tokyo prosecutors have charged the company, Kikukawa and other officials, arrested in February, with breaking laws regulating securities exchanges by falsifying company financial statements. If found guilty, individuals face up to 10 years in prison, a £79,000 fine, or both. The company can be penalised with a fine of up to £5.5 million.

Olympus has said it hid £925 million in investment losses going back to the 1990s.

"There is no mistake. The entire responsibility lies with me," Kikukawa told the Tokyo court.

Three other Olympus executives also pleaded guilty and the company also entered a guilty plea.

Kikukawa read from a piece of paper and apologised for "all the troubles caused to investors, customers, employees and the general public".

Prosecutors outlined in detail the elaborate schemes concocted over the years, using overseas bank accounts, paper companies and transactions it controlled behind-the-scenes, all to keep massive losses off the company books for years.

Mr Woodford, one of a handful of foreigners to lead a major Japanese company, was a key player in bringing the scandal to light. He has emerged as a hero in Japan, where outspoken people are rare and whistleblowers are routinely treated as outcasts. He has consistently defended Olympus products and the honesty of the rank-and-file workforce, while slamming Kikukawa and others at the top.

Mr Woodford initially tried to make a comeback at the company, but had to give it up when he learned that through a system of cross-shareholdings, management had a lock over appointments. But he sued in a British court, accusing Olympus of unlawful firing and discrimination, and won a £10 million settlement from Olympus in June.