Olympus is suing 19 former and current executives for £30 million (Y3.61bn) in compensation as it struggles to recover from a long-running £1.1 billion accounting scandal.
The Japanese camera manufacturer filed legal papers on 8 January with the Tokyo district court and confirmed today that all board members subject to the lawsuit, including president Shuichi Takayama, would quit in March or April, clearing the way for a comprehensive management overhaul.
But Michael Woodford, the firm’s former chief executive, who was fired for questioning dubious payments made by the firm and is also currently suing it for unfair dismissal, attested that the move was inadequate, telling the BBC that a complete clearout of the board was necessary to regain credibility.
"If corporate governance is to mean anything in Japan, and for those who care about the future of Olympus, the only way forward is an entirely new board of directors, which are untainted by past scandal," he said.
Woodford had written six letters to the directors due to concerns over Olympus’ business methods, but is now angry that three are likely to be exonerated.
The law suit was initiated by Olympus’ audit committee, which acted in response to an outside investigative panel that had been commissioned by the company to determine responsibility for the 13-year fiasco that concealed losses from investors.
The move will enable the executives “to complete passing on their roles to avoid any impact on business implementation”, but leaves the company in the unusual position of continuing to operate with several directors that it is suing for mismanagement.
The news has resulted in Olympus’s share price closing up 20% today – about half the level before the scandal unfolded – fuelled by hopes that the lawsuit would lead to the eventual renewal of the board.
According to Japanese media reports, the Tokyo Stock Exchange is also leaning towards allowing Olympus to keep its listing, but the TSE has not yet made a final decision on the matter. The TSE is likely to keep Olympus listed under a "security on alert" designation for the time being.
