Digital Camera Company Olympus, Under Investigation For Corrupt Practises AGAIN.
The Company that sells digital cameras via JB Hi Fi, Harvey Norman and specialist camera dealers has been described as a corrupt Company that has links to organised crime syndicates.
This time the U.S. Justice Department is taking aim at the Japanese Company for possible violations of anti-kickback and false claim laws.
Eighteen months ago the Company was linked with the Japanese Mafia after $4.9 billion was unaccounted for in a financial scandal at the Company. At the time investigators said that they were investigating links to Japanese organised crime groups.
In the latest investigation Olympus Corporation of America has been under investigation since November 2011 for possible violations of laws that normally apply to inappropriately encouraging resellers to buy their products that include cameras and medical equipment.
An Olympus spokeswoman said the company entered into discussion with the U.S. authorities in the October-December quarter, and since the investigation was ongoing, it couldn’t say anything beyond what was provided in the news release.
Insiders claim that the Company could be facing “massive fines” in the USA that could affect the Company’s current financials.
The Olympus spokesperson said no information on financial damages that might incur from the investigation was currently available. Nor was there an estimate on how long the discussion with the U.S. government would take or whether ant Olympus executives would be prosecuted.
On Friday, Olympus reported a US $273 million net profit for the April-December period.
The biggest contributed was the sale of medical equipment.
Corruption issues at Olympus were exposed when Michael Woodford, Olympus’s ex-chief executive, said he was fired after raising questions about corrupt practises at the Japanese Camera Company.
In a memo prepared by investigators and circulated at a meeting of officials from Japan’s Securities and Exchange Surveillance Commission, the Tokyo prosecutor’s office and the Tokyo Metropolitan Police Department, said that they were still investigating whether Olympus worked with organized crime syndicates to obscure billions of dollars in past investment losses and then paid them exorbitant sums for their services.
The Olympus scandal was precipitated on 14 October 2011 when British-born Michael Woodford exposed “one of the biggest and longest-running corporate corruption investigations in Japan.
Despite Olympus’ denials, the matter quickly snowballed into a massive corporate corruption scandal which is still ongoing.
What investigators discovered was that over $1.5 billion of investment losses and other dubious fees and other payments dating back to the late 1980s along with suspicion covert payments had been made to criminal organisations.
On 8 November 2011, the company admitted that the company’s accounting practice was “inappropriate” and that money had been used to cover losses on investments dating to the 1990s.
The company blamed the inappropriate accounting on former president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive vice-president Hisashi Mori.
By 2012 the scandal had developed into one of the biggest and longest-lived loss-concealing financial scandals in the history of corporate Japan. It resulted in 75-80% being wiped off the value of the Company.
The investigation which is still ongoing led to the resignation of much of the board, investigations across Japan, the UK and US, and the arrest of 11 past or present Japanese directors, senior managers, auditors and bankers of Olympus for alleged criminal activities.
Woodford received a reported $16m in damages from Olympus for defamation and wrongful dismissal in 2012.