Olympus Corp’s shares slid on Wednesday after the scandal-battered endoscope and camera maker revealed it may have broken a U.S. law that bans corporations from offering bribes to win business in overseas markets.<\/p>\n
The 6.8 percent tumble in Olympus’ stock also followed a surprise lawsuit by medical equipment maker Terumo Corp, which is vying with Sony Corp, FujiFilm Holdings and other companies to inject money into the cash-strapped company in return for a stake.<\/p>\n
Olympus in October told the U.S. Department of Justice about travel, meal and entertainment expenses paid by its U.S. subsidiary to doctors in a training program in Brazil that may have violated the Foreign Corrupt Practices Act, company spokesman Osamu Kobayashi said on Wednesday, confirming an earlier Bloomberg report.<\/p>\n
Bloomberg on Wednesday quoted Chairman Yasuyuki Kimoto as saying in a July 23 interview, “We understand DOJ is trying to gather lots of information on us.”<\/p>\n
“Olympus might have to be investigated further because of this,” said Nanako Imazu, an analyst at CLSA Asia-Pacific Markets in Tokyo. That whiff of fresh trouble is a concern for jittery Olympus investors, she noted.<\/p>\n
Kimoto also told Bloomberg that the enquiries into Olympus’ U.S. unit may be part of a wider industry probe.<\/p>\n
Strong-arm tactics?<\/strong><\/p>\n The decision by Terumo to seeks damages for loss of shareholder value from the accounting fraud that rocked Olympus last year might be a tactic by Japan’s leading maker of catheters and artificial hearts to garner more attention for its tie-up proposal, one corporate governance expert said.<\/p>\n Olympus said in a statement on Wednesday it had received a claim for 6.6 billion yen ($84 million) in damages from Terumo.<\/p>\n Terumo, which has proposed investing some $640 million in Olympus, is suing Olympus under Japan’s Financial Instruments and Exchange Act for failing to disclose its accounting fraud before signing a business and capital tie-up with the medical equipment firm seven years ago.<\/p>\n “This sounds to me like a sharp wake-up call to Olympus, to bring them to the negotiating table,” said Nicholas Benes, a corporate governance expert who runs the Board of Director Training Institute of Japan.<\/p>\n In a bid to underpin its finances, Olympus is considering tie-up offers from at least four other domestic firms, including those from Sony and Fujifilm.<\/p>\n Terumo’s lawsuit is the first made by an institutional shareholder against the firm, which admitted last year it had used improper accounting to conceal huge investment losses under a scheme that began in the 1990s.<\/p>\n “Olympus will very much not want a significant shareholder suing it based on the securities laws, as that could provoke other shareholders to sue,” said Benes.<\/p>\n The endoscope maker said in its statement it didn’t expect other shareholders to file similar lawsuits.<\/p>\n Shares in Olympus have fallen 44 percent since last October, when the company’s former CEO Michael Woodford blew the whistle on the decade-long accounting fraud at the firm.<\/p>\n The risk for the winner of the battle to woo Olympus is that it overpays for a stake in a company that may not have finished revealing past problems, said Yasuo Sakuma, portfolio manager at Bayview Asset Management.<\/p>\n “There’s probably a lot more skeletons in its closet to come out. This Brazil case is one of them,” Sakuma said. ($1 = 78.1000 Japanese yen)<\/p>\n Related articles<\/strong><\/p>\n Olympus owes the taxman $62.6 million<\/strong><\/a><\/p>\n Panasonic to provide Olympus with up to R5.3bn<\/strong><\/a><\/p>\n Olympus chops 2,500 jobs to bolster finances<\/a><\/strong><\/p>\n Booted Olympus CEO wins unfair dismissal case<\/a><\/strong><\/p>\n