Olympus shares soar as it sues executives for fraud

Olympus shares soar as it sues executives for fraud

Olympus sharesOlympus shares have soared by close to 20% after the firm confirmed it would sue current and former executives over a cover-up of losses.

It told the BBC it was suing 19 current and former executives after a $1.7bn (£1bn) accounting cover-up.It comes after an independent panel report looking into management involvement in the fraud.The lawsuit, filed on 8 January, seeks up to 3.6bn yen ($46.8m; £30.3m) in damages.At close of trade in Japan, shares in Olympus were up 19.94% to close at 1,263 yen.

The fraud was revealed after the camera company fired CEO Michael Woodford when he questioned dubious payments.The case will focus on current and former board members, including ex-president Tsuyoshi Kikukawa, former vice president Hisashi Mori and auditor Hideo Yamada.The current president Shuichi Takayama will step down this month for his involvement in the scandal, reported Kyodo News.Olympus spokesman Satoshi Ikuta also confirmed that all board members subject to the lawsuit would be stepping down in March or April.

Analysts said the lawsuit against its own executives was the latest in a series of events that have called the future of Olympus into question.”Having nobody at the helm makes it easier for a takeover,” said Nicholas Smith from CLSA in Tokyo.The shares were also boosted by a report in the Nikkei newspaper that Olympus will probably be fined by the Tokyo Stock Exchange rather than being delisted.”With a company of this size and precedence, I don’t think it’s going to delist,” said Marc Einstein, technology industry manager at Frost & Sullivan.Mr Einstein added that while most of the company’s “dirty laundry” is out in the open now, its core medical device business still remains solid and is currently undervalued Olympus has lost almost half its market value since the scandal first came to light in October. – BBC