The scandal at Olympus seems to be approaching the end game.
Japanese prosecutors arrested seven men in Tokyo on Thursday, including former company president Tsu-yoshi Kiku-kawa. The seven were held over their roles in a $1.7 billion accounting fraud at the technology firm.
The scandal came to light when then-chief executive Michael Woodford queried some of the company’s dubious takeover deals.
At a news conference in London today, Woodford said the arrests still left a lot of questions unanswered:
“Today does demonstrate that there is a seriousness in Japan to investigate what has happened, but there are still many important issues not covered by today’s announcement. Firstly, the banks – these were huge amounts of money and we need to understand to what extent the banks were involved.”
Woodford was a rare foreign CEO in Japan. Now attention turns to finding a new boss for the company. Likely candidates include three board members that an investigative panel says weren’t involved in the fraud. Whoever is chosen, Woodford says corporate Japan as a whole needs to clean up its act:
“Transparency and oppenness is the most important thing in ensuring that this tale and all its tentacles is purged and cleansed in the right way.”
The future for Olympus remains uncertain, but its lucrative medical endoscope business means it could become a takeover target. Sony and Fujifilm are mentioned as possible buyers, but any potential suitor will first want to see that the company has put a troubled past behind it.