Six former directors at Japanese camera and medical equipment maker Olympus have been ordered to pay the company £410m in damages over a massive accounting fraud.
Tokyo District Court ruled that ex-company president Tsuyoshi Kikukawa and five others, who were sacked when the fraud was discovered, are liable for the fines. One of the six has died but Olympus has suggested his three heirs may be asked to pay.
This is the latest phase in the long-running fraud case which has already seen a settlement with 13 former Olympus executives; who faced financial penalties arbitrated by the Court.
Former CEO Michael Woodford turned whistle blower shortly after being appointed as the company’s first non-Japanese top executive in 2011. He questioned a number of large fees paid by the company in relation several takeover deals.
An investigation uncovered a £1.1bn accounting fraud which led to three former Olympus executives being found guilty of falsifying accounts and given suspended sentences.
It’s a case that underlines the need for companies to make sure they have internal controls and procedures to help identify and take action against fraud. Large-scale internal fraud should not go unidentified until a new CEO walks through the door.