Bloomberg News

Olympus Probe in 2009 Said Gyrus Takeover Fees Not ‘Illegal’

October 24, 2011

Oct. 24 (Bloomberg) -- Olympus Corp., facing criticism by shareholders for paying advisers $687 million in its purchase of Gyrus Group Plc, concluded in a 2009 probe that it was “not able to discover any illegal or unjust points” in the fees.

The Japanese camera and medical-equipment maker’s internal investigation was conducted by an attorney, an accountant and a professor, according to a copy of the report obtained by Bloomberg News.

“We were not able to discover any illegal or unjust points on the part of Olympus’ directors in the payment of advisory fees, any careless mistake in the process of understanding the facts underlying the deciding of that payment, or any circumstances causing the deciding of that payment to be assessed as markedly unreasonable,” according to the May 17, 2009, report.

Olympus said last week it was forming another independent committee to investigate previous takeovers. Nippon Life Insurance Co., the largest Olympus shareholder; Southeastern Asset Management Inc.; and Harris Associates LP had asked the company to respond to investors’ concerns about takeover payments.

‘Been Here Before’

Michael C. Woodford, fired as chief executive officer on Oct. 14, made public a PricewaterhouseCoopers report that said the company may face regulatory and legal scrutiny because of payments made to advisers in the Gyrus acquisition.

“We’ve been here before,” Woodford said yesterday in an e-mail. The aim is “to push everything into the distant future, and get the current dazzling spotlight of press scrutiny off them.”

The Tokyo-based company, the world’s biggest maker of endoscopes, fell 11 percent to close at 1,099 yen, the lowest since 1998, at the end of trading on the Tokyo Stock Exchange today. The company has dropped 56 percent since Woodford was fired, erasing $4.9 billion in shareholder value.

Olympus, which started business 92 years ago, said Oct. 19 it paid $687 million in fees to advisers for its $2 billion purchase of Gyrus, almost double the 30 billion yen ($391 million) in fees that Chairman Tsuyoshi Kikukawa disclosed the previous day.

--With assistance from Takashi Amano in Tokyo. Editors: Michael Tighe, Anand Krishnamoorthy

To contact the reporters on this story: Chris Cooper in Tokyo at

To contact the editor responsible for this story: Peter Langan at

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