Feb. 16 (Bloomberg) -- Michael Woodford, the former president of Japan’s Olympus Corp., said the company’s auditors and lenders should be investigated.
While arrests of former Olympus executives in Japan were encouraging, Woodford said at a press conference in London today that he doesn’t want to see only a “partial purge” of those linked to the fraud.
“Transparency, openness, is the most important thing in ensuring” the fraud is “purged and cleansed,” Woodford said.
Three former executives at Olympus, including ex-Chairman Tsuyoshi Kikukawa, and four others were arrested today for suspected violations of Japan’s Financial Instruments and Exchange Act. Olympus is now facing shareholder lawsuits and further criminal investigation after admitting to the 13-year cover up. Woodford said he was dismissed by the camera maker in October after questioning inflated takeover costs.
Olympus, based in Tokyo, spent about $1.5 billion on fees and “Mickey Mouse” deals, according to Woodford. He said Sumitomo Mitsui Banking Corp. was the main lender to Olympus.
“SMBC and Olympus need to confirm who provided that money,” he said.
Sumitomo Mitsui spokesman Kiyoo Kuniyoshi didn’t immediately respond to an e-mail seeking comment.
Three serving directors at the company -- Masataka Suzuki, Kazuhiro Watanabe and Shinichi Nishigaki -- should be replaced because they were warned about the scandal and didn’t act, Woodford told reporters.
He also said auditors KPMG LLP and Ernst & Young LLP should face questions, while investigators should look into 100 deals in which Olympus bought companies ranging from DVD sellers to pet-food makers.
KPMG spokeswoman Judith Dow and Ernst & Young spokesman Daniel Cusworth had no immediate comment.
Woodford is suing Olympus in the U.K. employment tribunal for discrimination and breaching whistle-blowing rules, he said today. A hearing in the case is scheduled for March 1.
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