Olympus head promises changes as firm posts loss

The president of Olympus on Monday promised changes at the company as it seeks to start afresh after a year in which it was hit by an accounting scandal that tarnished the image of corporate Japan. Shuichi Takayama said a new board that would be appointed at a shareholders' meeting in April would enhance the firm's position. The comments came as he revealed that Olympus had a net loss of 33.08 billion yen ($426 million) for the nine months to December while also forecasting a loss of 32.0 billion yen for the full year to March owing to one-off costs unrelated to the scandal. The forecast is the first since the scandal broke last year, with the camera and medical equipment maker previously saying it could not make a full-year projection because it did not know the ramifications of the crisis. Olympus said earlier this month it would hold an extraordinary general meeting (EGM) of shareholders on April 20, at which the company is expected to select a new management board. Takayama and five other current board members -- who are being sued by the company over a scandal in which $1.7 billion in investment losses dating back to the 1990s were hidden -- are expected to resign at the meeting. Takayama said last month a new management team would be nominated in mid-March and selected at the meeting. "The company's position for sure will be enhanced" once the new management takes over, Takayama said Monday. "When that happens, I think it will be reflected in the share price." Olympus's admission that a small group of top executives used overpriced deals to cover up bad investments dating back to the 1990s has shaken confidence in Japanese corporate governance. Last month, a group of Japanese shareholders filed a lawsuit against Olympus, demanding $2.9 million in compensation after the accounting scandal hammered the firm's shares. The shareholders had bought Olympus stock before November 7, 2011, prior to the firm's admission it had hidden the investment losses, allegations that were first aired by chief executive Michael Woodford after he was ousted in October. Following his sacking, Woodford launched aggressive international media offensives against his former bosses, questioning the firm's past acquisition deals and the outsized consultant fees it had paid. His efforts eventually pushed Olympus to admit to the cover up. But the Briton, the firm's first non-Japanese president, did not win the backing of Japanese institutional investors and gave up a push to get his job back. The company's stock lost more than three-quarters of its worth in the wake of the scandal -- diving to just 424 yen at one point from 2,482 yen the day before Woodford's ouster. The shares have rebounded from those lows, closing Monday at 1,034 yen before Olympus announced its financial results. "After admitting the scandal, the company has done what it can to mend its past acts, using outside panels and publicising its discoveries," Takayama said. "It was like picking up rocks to build a stone wall," he said. "We can report what we have done at the shareholders meeting. Olympus is considering drastic changes. It will be left to stakeholders to make their own judgements," he said. Japanese film and camera maker Fujifilm said last month it offered Olympus a capital and business tie-up, while the scandal-hit firm was also reportedly in talks with Sony over a similar deal. For the nine months to December, Olympus said operating profit fell 19.0 percent on-year to 25.9 billion yen on sales of 624.6 billion yen, which were up 0.1 percent. "We were worried about the impact of the delayed booking of losses, as well as continued strength of the yen and deterioration of the European economy," Takayama told a news conference. "However, thankfully, we saw solid business performance during this period, with the medical business at its core."