Japanese Prosecutors Raid Olympus Headquarters, Home of Former Chairman

In a move that is as difficult to interpret as any other in the massive two-month-old accounting scandal at Olympus, Japanese authorities raided the headquarters of Olympus in Tokyo on Wednesday as well as the offices of three companies used in the accounting fraud and the home of ousted Board Chairman Tsuyoshi Kikukawa.

The subtexts appear to involve a reassurance to investors and the public that the proper steps are being taken to resolve any illegalities, against a backdrop of a continuing struggle between ousted President Michael Woodford and the Olympus Board of Directors. That drama appears to have taken a nationalistic turn: Woodford has marshalled foreign investors who support his return to the head of the company, which would involve purging the entire current Board, and the Board is apparently jockeying to increase Japanese investment in order to decrease the influence of foreign investors, as a means of shoring up support for themselves.

The New York Times reports that Olympus executives could still face jail time, Olympus could still be delisted from the Tokyo Stock Exchange, and that the scandal casts "a shadow" over the company's "long-term viability."

Mike

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Original contents copyright 2011 by Michael C. Johnston and/or the bylined author. All Rights Reserved.

Comments

[Richard]

You've given up film for new images - so why are you bothered? Have you not already scanned any worthwhile images that you have?

Sure it's a niche market, but it's not going away, certainly not where I live.

Might also be an incentive for people to do large format. You can get decent prints from relatively inexpensive flatbeds - at least I think you can - you may well disagree.

[Hugh]

Olympus cameras are nice, but not essential.

Losing Olympus microscopes and medical imaging would be a tragedy. Zeiss and Leitz don't really come close in that field.

[Ed Grossman]

It's a real testament to the uniquely human emotion called hope that so many people see a positive outcome here. For the sake of Olympus employees and enthusiasts (myself included) everywhere, I'll keep my fingers crossed that they're right. If this turns out to be the biggest worry amongst "Family T.O.P" in 2012, we'll really be doing pretty well, won't we?

[John Nollendorfs]

The Epson V700 does a pretty decent job and allows you to do 8x10 and 4x5 also. I've compared color neg scans, with a Nikon 8000, not $1500 difference in the resulting scans. Kinda puts the difference in the skills of the operator. It's truly amazing how the technology has improved.

Another option is to use a high quality camera to copy the color tranny, or B&W neg from a light box. Just something to consider when that Minolta finally gives up the ghost! ;-)

[Archer]

Oh well, at least my OM-1 still works.

[Richard Ward]

On the 'Nationalistic' side of Olympus news, it appears that Oly's existing management has issued a hefty chunk of shares to 3 or 4 Japanese Photographic Competitors which raised a nice pile of money. However! The key effect of the step seems to be the serious ramping up of the number of shares of Olympus stock that are in the hands of 'friendly' investors and seriously diluting the ability of Michael Woodfords group of 'unfriendly' investors to take control of the company.

[Paris]

Wow. Can't wait for the movie.

[David H.]

Unfortunately (and predictably), it had taken a "nationalistic turn" when Olympus originally fired Woodford for not understanding Japanese corporate management despite having worked at Olympus for 30 years. When a retired Olympus president said that Olympus should never have hired a foreigner as CEO, it had taken a nationalist (or worse) turn. In fact, the very second that a non-Japanese gets involved in a scandal in Japan, it is a given that in some segments it will take a nationalist (or worse) turn.

I find it interesting that a lot of my acquaintances view this as: "That's really an old incident, it would have been better not to have brought it up." Others are silent about it in contrast to what happens when such a thing occurs at a major foreign company, especially a US company.

Oh, and despite earlier statements to the contrary by Olympus, most of the present board will not be forced to leave.

[PWL]

Damn. It gets uglier and uglier...

Hmmmm....let's see...Leica stopped making SLRs...never even got to autofocus....or DSLRs....so if things get really bad for the Olympus camera division, maybe Leica ought to buy the division.

They'd be getting a very innovative company making state of the art DSLRs and some of the best digital lenses in the world. And if they didn't change the pricing too much, they might actually be competitive with Nikon and Canon in the DSLR market.

Just a thought....

[MartinP]

Just a remark about about "....never even got to autofocus....or DSLRs....". Well actually they did both of those things. The auto-focus patents were sold/traded to Minolta (hence the first mass-market auto-focus SLR's came from them) and the digital back for a Leica film SLR was highly thought of and only killed when the software (or electronics?) partner pulled out.

So far as Olympus is concerned, it is likely that most of the group value is in the medical imaging sphere. If the group is broken up, will the photo division be sufficiently attractive for sale? Good question....

[PWL]

Point taken, Martin. You are right.

What I should have said is that Leica made the fatal mistake of never fully or properly implementing these technologies into their products. Digital back was a nice but clumsy attempt to catch up with the digital revolution, in my opinion.

But it does seem to me that if push came to shove, purchasing the camera division of Olympus might be a good way for Leica to get back into the (D)SLR game....and good for two of my fave camera brands...