Japanese imaging company Olympus Corp is facing a civil lawsuit from six banks over a 13-year accounting fraud, one of the biggest lawsuits the country has seen.
The six Japanese trust banks, including State Street Trust and Banking Co Ltd, Mitsubishi UFJ Trust and Banking Corp, and The Nomura Trust and Banking Co Ltd, are seeking compensation worth a total of 28 billion yen ($273 million) in damages relating to Olympus’ accounting fraud from 2000 to 2011.
The lawsuit, which was filed Monday, stems from a 2011 accounting scandal made public by CEO-turned-whistleblower Michael Woodford, who admitted that the group concealed investment losses dating back to the early 1990s by overpaying for acquisitions.
A subsequent investigation revealed the cover-up and led to the arrests of Olympus executives including chairman Tsuyoshi Kikukawa, who were found guilty by a Japanese court in July 2013.
The company was fined 700 million yen, and the three officials received suspended sentences from the Tokyo District Court.
Olympus in November lowered its profit forecast for the fiscal year ending March, citing 17 billion yen ($166.49 million) set aside for lawsuits.
The company says that nearly 20 cases have been submitted to courts seeking a total of 85.6 billion yen; Olympus has publicly recognized three of the cases so far.
Olympus stock has suffered in the wake of the revelations. On Thursday its shares were off 1.2 percent at 3,020 yen, slightly outperforming the benchmark index which was down 1.9 percent in afternoon trade.
“This is just a reminder to the market of the contingent risk associated with the past of Olympus,” said Claudio Aritomi, a Tokyo-based analyst at Macquarie Group Ltd. “There was always the risk there could be more coming.”
By Maesie Bertumen
Image: Sebra / Shutterstock.com