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Britain to Prosecute Japan’s Olympus for Fraud Britain to Prosecute Japan’s Olympus for Fraud
(about 3 hours later)
TOKYO — British authorities are set to prosecute Olympus, the Japanese manufacturer embroiled in a $1.7 billion accounting fraud two years ago, reviving a high-profile scandal after a Japanese court limited its verdict to modest fines and suspended sentences for several executives. TOKYO — British authorities plan to prosecute Olympus, the Japanese manufacturer that was embroiled in a $1.7 billion accounting fraud two years ago, reviving a scandal after a Japanese court imposed modest fines and suspended sentences on several executives.
Olympus, along with its British unit, Gyrus, a medical equipment company, will be prosecuted by Britain’s Serious Fraud Office over falsifying financial statements in 2009 and 2010 in an alleged breach of Britain’s Companies Act, the company said in a statement Wednesday. Olympus, along with its British unit, Gyrus, a medical equipment company, will be prosecuted by Britain’s Serious Fraud Office on charges of falsifying financial statements in 2009 and 2010 in a breach of Britain’s Companies Act, the company said in a statement Wednesday.
Olympus, which is based in Tokyo, admitted in late 2011 that it had operated an elaborate, long-running scheme to cover up $1.7 billion in losses after its newly installed chief executive, Michael C. Woodford, blew the whistle on irregular accounting practices at the company. Olympus, which is based in Tokyo, admitted in late 2011 that it had operated a long-running scheme to cover up $1.7 billion in losses after its newly installed chief executive, Michael C. Woodford, uncovered irregular accounting practices at the company.
The internal allegations had led Olympus to fire Mr. Woodford, a British national. But he went public with evidence of wrongdoing and has since submitted evidence and testimony to British, American and Japanese investigators. The internal allegations led Olympus to fire Mr. Woodford, a British national. But he went public with evidence of wrongdoing and has since submitted evidence and testimony to British, American and Japanese investigators.
The British investigation began in November 2011, but it has taken until now to amass the evidence, a spokesman for the Serious Fraud Office said. The Japanese and British authorities have been in contact over the investigation, the spokesman said. The British investigation began in November 2011, but it has taken until now to collect the evidence, said a spokesman for the Serious Fraud Office. The Japanese and British authorities have been in contact over the investigation, the spokesman said.
The first British court date is next week, with the case likely to be heard in the autumn. It was unclear what the maximum penalties could be if the company was found guilty. Gyrus is a medical endoscopic equipment maker with about 1,600 employees. The first British court date was set for next week, and the case is likely to be heard in the fall. It was unclear what the maximum penalties could be if the company was found guilty.
In Japan, a local court handed three Olympus executives suspended sentences and fined the company a modest sum of 700 million yen ($7 million). Olympus also was hit with separate fines of 192 million yen from Japan’s Financial Services Agency and 10 million yen from the Tokyo Stock Exchange, which elected to keep Olympus stock listed. In Japan, a local court in July handed three Olympus executives suspended sentences and fined the company 700 million yen ($7 million). Olympus also was hit with separate fines of 192 million yen from Japan’s Financial Services Agency and 10 million yen from the Tokyo Stock Exchange, which elected to keep Olympus stock listed.
Olympus’s limited censure by the Japanese authorities set off criticism among corporate governance experts that the company had been let off too lightly. It also highlighted the tendency here for criminal responsibility in corporate scandals to fall on individuals, often picked to take the blame for the sake of the company.Olympus’s limited censure by the Japanese authorities set off criticism among corporate governance experts that the company had been let off too lightly. It also highlighted the tendency here for criminal responsibility in corporate scandals to fall on individuals, often picked to take the blame for the sake of the company.
Olympus, a leading maker of medical endoscopes and digital cameras, has appeared to move on. Last year, it settled a multimillion-dollar lawsuit brought by Mr. Woodford over discrimination and unfair dismissal. The company’s share price, which plummeted after the initial revelations of fraud at the company, has since recovered to prescandal levels.Olympus, a leading maker of medical endoscopes and digital cameras, has appeared to move on. Last year, it settled a multimillion-dollar lawsuit brought by Mr. Woodford over discrimination and unfair dismissal. The company’s share price, which plummeted after the initial revelations of fraud at the company, has since recovered to prescandal levels.
After revealing massive losses in 2011, Olympus has also climbed back into the black, booking a net profit of 8 billion yen for the latest fiscal year through March, compared with a 49 billion yen loss the previous year. Sony, which invested 50 billion yen in Olympus last September, is now its biggest shareholder. After revealing big losses in 2011, Olympus has also climbed back into the black, booking a net profit of 8 billion yen for the latest fiscal year through March, in contrast to a 49 billion yen loss the previous year.
In its statement, Olympus said that it was difficult to predict the extent of penalties and fines that might be imposed on the company by British authorities and that any impact on its finances was unclear.In its statement, Olympus said that it was difficult to predict the extent of penalties and fines that might be imposed on the company by British authorities and that any impact on its finances was unclear.
The company said that it was cooperating fully with the investigations. The company said it was cooperating fully with the investigations.

Mark Scott contributed reporting from London.

Mark Scott contributed reporting from London.