JOIN USFour months after one of Japan's biggest corporate scandals, police and prosecutors on Thursday arrested seven men, including the former president of Olympus Corp and ex-bankers, over their role in a $1.7 billion accounting fraud at the medical equipment and camera maker.
Tokyo prosecutors arrested ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said. Also arrested were former bankers Akio Nakagawa and Nobumasa Yokoo and two others suspected of helping hide huge investment losses through complex M&A deals.
The three former executives had been identified by an investigative panel, commissioned by Olympus, as the main culprits in the fraud, seeking to delay the reckoning from risky investments made in the late-1980's bubble economy.
The scandal was exposed in October by then-CEO Michael Woodford, who was sacked by the Olympus board after querying dubious M&A deals later found to have been used to conceal the losses. Woodford got his job back, but gave up that bid last month, blaming cozy ties between management and big Japanese shareholders and citing the strain on his family.