29 Aug 2013 - Olympus' Fraud
Former Olympus Corp. (7733) Chairman Tsuyoshi Kikukawa received a suspended sentence for his role in a $1.7 billion accounting fraud that caused the Japanese camera maker’s market value to plunge 80 percent.Olympus itself, also the world’s largest maker of endoscopes, was ordered to pay 700 million yen ($7 million) in fines by Tokyo District Judge Hiroaki Saito today. Former Olympus Executive Vice President Hisashi Mori and Hideo Yamada, a former auditing officer, also got suspended sentences.
Judge Saito’s decision comes almost two years after revelations that the company had falsified financial reports to conceal losses on investments. The sentences reflect the defendants’ claims that former Olympus presidents Masatoshi Kishimoto and Toshiro Shimoyama made the decision to hide losses, while he inherited the aftermath.
“Kikukawa and Yamada succeeded in a negative legacy and weren’t involved in the decision-making process to hide losses,” Saito said in court today. “They were distressed and didn’t benefit personally from hiding losses. Mori followed their orders.”
The camera maker still faces lawsuits by investors including State Street Bank and Trust & Co. and Government of Singapore Investment Corporation Pte Ltd. in a joint complaint seeking 19.1 billion yen in damages.
Suspended Years
Kikukawa and Yamada were given three years of jail time suspended for five years, while Mori got two and a half years jail time suspended for four years. Kishimoto and Shimoyama haven’t been charged because the statute of limitations has expired, Kyodo News reported on April 23.Prosecutors had asked for a five-year jail term for Kikukawa and a 1 billion yen fine for Tokyo-based Olympus, Kyodo News reported on March 26. Lawyers for the defendants said jailing them would be unfair because other executives involved weren’t charged, the news service reported.
The fraud, “destroyed the image of Japanese companies internationally,” Kikukawa told the court in September when pleading guilty along with the other executives.
Olympus fell 0.9 percent to 3,170 yen at the close in Tokyo trading. The shares have more than doubled in the past 12 months, compared with a 55 percent jump in the benchmark Nikkei 225 Stock Average.
Whistleblower Woodford
Kikukawa resigned in October 2011, weeks after the board fired former President Michael Woodford, who uncovered the accounting discrepancies and went public with them after the Olympus board declined to take action. The company and three former executives eventually admitted using fraudulent takeover deals to hide losses for 13 years starting in the 1990s.Olympus restated five years of earnings results to account for the bookkeeping fraud, wiping $1.3 billion off its balance sheet and prompting speculation the company would seek a capital infusion. Reports of the attempts to hide losses in mid-October 2011 triggered an 82 percent drop in the company’s shares between Oct. 13 and Nov. 11, 2011.
The company said in July last year it would pay 191.8 million yen in fines to Japan’s financial regulators, while the camera maker itself has sued 19 former executives for damages related to the cover up of losses.
Founded in 1919 as a microscope and thermometer maker, Olympus produced its first camera in 1936 and a predecessor to the modern-day endoscope in 1950, according to its website. The company controls 75 percent of the global market for endoscopes, instruments doctors use to peer inside the body to help diagnose disease.
A former Commerzbank AG and Societe Generale SA (GLE) banker charged with aiding the accounting fraud was granted bail in January by a federal judge in New York. Chan Ming Fon, a Taiwan citizen living in Singapore, was indicted Jan. 17 and charged with one count of conspiracy to commit wire fraud. He faces as many as 20 years in prison on the conspiracy charge.
Source: Bloomberg.com
12 Jul 2012
Olympus' Fraud
Olympus president Shuichi Takayama said Olympus may need to enter a
tie-up with another company after corrected business results revealed a
huge hole in the company balance sheet. Speaking at a press conference
in Tokyo, Takayama told reporters that a merger was one of the options
on the table after Olympus was forced to reveal the true state of its
business in the wake of a £1.1 billion accounting scandal dating back to
the 1990s. The amended accounts show that Olympus's net assets fell to
46 billion yen at the end of September 2011, down from a restated 225
billion yen in March 2007.
The embattled medical equipment maker is seeking an investor to inject
around ¥50 billion ($622.65 million) to shore up its finances after the
$1.5 billion accounting scandal that was uncovered last year weakened
its balance sheet, forcing it to turn to rivals for help.
Olympus has issued a response to media reports that it is in 'final talks' on reaching a tie-up with Sony. For Sony, an
alliance with Olympus would strengthen ties with a key customer for its
optical sensors and aid its efforts to build its medical business.
Updated on 7 March 2012
Baxter Colleague Infusion Pump
Disappointingly, the P1.7, failed to deliver as it now suffer a quality issue of defective LCD screen. These screens are the result of Baxter's own making as it was an old old issue with the Baxter colleague family of pumps.
Mind you, the company has screwed itself out of the medical equipment arena, when it first introduced colleague into the market. We gotten our pumps back in 2000 and thereafter till now have been experiencing device failure, device recall, field service rectification, etc. You know it has been very painful process. I personally give a thumb down.
November 2011 - Baxter Colleague Pump
Baxter Healthcare has just revealed that finally the new Baxter Colleague Volumetric Infusion Pump, version P1.7, is now allowed by HSA for distribution to the various Singapore hospitals in exchange for the old problematic pump, the predecessor of P1.7, the P1.5. But question lingers on as to how stringent is the design is to the manufacturer to tackle the problem faced by the older version, P1.5. No one really knows at this stage how reliable and trust worthy is the pump to provide to the healthcare institution in terms of safety, etc. I prayed to God for that.
