(Updates with committee member’s comments in fourth paragraph.)
Dec. 27 (Bloomberg) -- An Ernst & Young ShinNihon LLC committee said it’s still investigating whether the audit of Olympus Corp.’s accounting was appropriate after the Japanese camera maker admitted hiding investment losses.
Olympus’s purchase of Gyrus Group Plc has complicated links to the company’s overall cover-up and will require more time to probe, the panel said today in a statement.
ShinNihon, which signed off on Olympus’s 2010 results, formed the committee this month to verify an internal investigation that earlier found nothing wrong in its audit of the endoscope maker. Olympus, reeling from a $1.7 billion accounting fraud, restated more than five years of past earnings on Dec. 14, wiping out 70 percent of its net assets.
Olympus’s cover-up started “way before” ShinNihon took over the audit, Toshifumi Takada, a panel member and economics professor at Tohoku University in Miyagi, northern Japan, said in Tokyo today. “We’re probing whether it was possible to point out issues” related to Gyrus before Olympus admitted to the 13-year cover-up, he said.
Olympus is also investigating about 70 executives to answer queries over losses and transactions for acquisitions, including $687 million in payments to advisers in the purchase of Gyrus in 2008 and stake writedowns in three other takeovers. In March 2010, $620 million was paid to buy back Gyrus preferred shares given to its advisers as part of fees.
Japan’s Financial Services Agency is looking into any role the auditors may have played in the Olympus cover-up, Minister Shozaburo Jimi said earlier this month.
The panel found the handover between KPMG Azsa LLC and ShinNihon didn’t break any rules, according to Nobuo Gohara, a lawyer and committee member.
KPMG Azsa, which signed off on Olympus’s 2009 results after confronting the camera maker over accounting irregularities, and ShinNihon, failed to conduct an adequate handover, Olympus’s investigation panel said earlier this month.
--With assistance from Takashi Amano in Tokyo. Editor: Drew Gibson.
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