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Olympus: The Accounting Scandal

Olympus
Legal Name Olympus Corporation
Founded 1919
Headquarters
Olympus Headquarters in Tokyo, Japan
Industry Imaging, Medical Equipment and Consumer Electronics
Key People Involved Tsuyoshi Kikukawa (Former Chairman/ CEO), Michael Woodford (Former CEO, Whistleblower), Hisashi Mori (Executive VP), Hideo Yamada (Auditor)
Scandal Exposed 2011
Outcome Legal Charges, Resignations, Fines, Governance Reforms[1]

In 2011, Olympus Corporation—a 92-year-old Japanese maker of cameras and medical equipment—was involved in a massive accounting fraud that shocked corporate Japan.[2]The scandal involved the concealment of approximately $1.5-$1.7 billion in investment losses over decades, a cover-up described as one of the biggest and longest-running loss-hiding arrangements in Japanese business history.[3] Revelations of this fraud shook investor confidence, wiping out most of Olympus's market value (the share price went down approximately by 75-80%)[4] and raising serious concerns about corporate governance practices and transparency in Japan. [2]

Timeline:

Duration Significant Events Occured
Late 1980s-1990s: Scandal Origins
  • After the late 1980s economic bubble burst, Olympus Corporation lost a lot of money on speculative investments (about $1.4 million).[2]
  • Olympus used tobashi, an unlawful tactic, to hide losses in offshore tax havens and off-balance-sheet businesses.[3][5]
  • Olympus used offshore corporations in the Cayman Islands to hide large losses, thinking market circumstances would improve and recover them.[6]
Early 2000s: Cover-ups Increase
  • By the early 2000s, Olympus' investment losses were huge, requiring Chairman Tsuyoshi Kikukawa to hide them.[2]
  • Exorbitant advising fees and acquisition charges masked the company's prior losses by acquiring smaller enterprises at artificially inflated rates.[3]
2006-2008: Major Fraudulent Transactions
  • From 2006 to 2008, Olympus acquired three unconnected domestic companies (Altis, Humalabo, and News Chef) for a total of ¥73.4 billion ($733 million). These enterprises were swiftly written off due to their low worth.[2]
  • In 2008, Olympus bought UK medical equipment maker 'Gyrus Group' for $2.2 billion, paying suspiciously high advisory fees of $687 million to obscure intermediaries (AXES America and Axam Investments) to repay hidden debts.[3]
Mid 2011: Whistleblowing
  • In July 2011, FACTA, a Japanese financial journal exposed Olympus's dubious acquisitions and high advising fees.[7]
  • Olympus's first non-Japanese CEO was British executive Michael Woodford, appointed on October 1, 2011. He immediately questioned the improper financial practices.[8]
  • Woodford questioned higher management about suspicious transactions after hiring PricewaterhouseCoopers (PwC) auditors.[2]
  • On October 14, 2011, Olympus's board immediately laid off Woodford for questioning transaction validity. He informed the media and regulators of the issue.[2]
Late 2011: Immediate After effect
  • Olympus first refuted claims but later agreed to concealing $1.7 billion in losses from the 1990s through inflated purchase expenses and advising fees.[9]
  • Following public outcry and investor pressure, Chairman Tsuyoshi Kikukawa, Vice President Hisashi Mori, and auditor Hideo Yamada resigned.
  • Olympus' shares lost approximately 75% of their market value in weeks, hurting stockholders and pension holders.[2]
2012: Legal Actions and Investigations
  • The Securities and Exchange Surveillance Commission (SESC) and Tokyo prosecutors investigated Olympus's finances extensively.[2]
  • In February 2012, Japanese authorities arrested Kikukawa, VP Hisashi Mori, auditor Hideo Yamada, and external financial advisors implicated in the deception.[10]
  • Olympus was fined ¥700 million ($7 million) by Japanese regulators for financial disclosure violations.[11]
2013-2015: International Responses and Resolutions
  • Leading executives Kikukawa and Mori received suspended prison sentences in 2013.[2] Two main bankers who structured the fraudulent financial schemes were imprisoned.
  • Olympus paid Woodford £10 million for wrongful dismissal and defamation in 2012.[8]
  • US and UK officials launched an investigation into Olympus due to its international fraud. In 2015, the SEC banned key intermediary Hajime Sagawa from the securities business.[6]
Post-Scandal: Governance and Regulation Changes
  • Japanese corporate governance was significantly changed after the scandal, underlining the consequences of opaque management.[3]
  • To rebuild investor trust, Olympus appointed outside directors and made financial reporting more open.[2]

Key Players and Roles:

Meeting with Olympus CEO Tsuyoshi Kikukawa and UNDP GWA Misako Konno, Japan

Various individuals and entities played significant roles in the Olympus scandal, including top executives within Olympus, the company's auditing firms, and certain external stakeholders. Below is an overview of the key players and their roles:

Tsuyoshi Kikukawa (Former Chairman/CEO):

  • Kikukawa led Olympus for a decade (CEO from 2001, later chairman) and was at the centre of the fraud.[2]
  • He has been described as running the company "like an emperor" during his tenure.[3]
  • Under his leadership, Olympus carried out a series of questionable acquisitions and payments used to hide past losses.[3] He resigned in October 2011 after the scandal broke, and his successors accused him of wrongful accounting.[2]

Michael Woodford (Former CEO and The Whistleblower):

  • Woodford, a 30-year Olympus veteran and a non-Japanese executive, was promoted to president/COO in April 2011 and then CEO by October 2011.[8]
  • Almost immediately, he raised concerns about unusual acquisition payments, particularly the huge $687 million fee paid to advisers in the 2008 Gyrus acquisition.[2]
  • Upon pressing for answers, he was abruptly dismissed by the board on October 14, 2011.[12]
  • Woodford's clashing management style was widely considered retaliation for his questioning of the suspicious transactions.[8]
  • Following his dismissal, Woodford publicly exposed the scandal.[4]
  • His role was pivotal in exposing the fraud, and he later campaigned to be reinstated to reform the company which went unsuccessful.[2]

Hisashi Mori (Executive Vice President):

  • Mori was a senior Olympus executive and board member who joined the firm in 1981 and rose to EVP by 2011.[2]
  • He initially defended the questionable acquisition payments when Woodford inquired, but as the investigation deepened, Mori confessed that Olympus had been systematically covering up losses for decades.[3]
  • Internal reports and media identified Mori as a central figure who played "the main role in the cover-up," including managing documents for the fraudulent transactions.[13]
  • He was laid off in November 2011 for his involvement, though initially he remained on the board until an emergency shareholders' meeting could remove him.[2]

Hideo Yamada (Standing Auditor/Internal Auditor):

  • Yamada was Olympus's internal auditor (appointed as a Standing corporate auditor in June 2011) and a long-time employee since 1963.[2]
  • Despite being in a role meant to ensure financial integrity, Yamada was largely involved in fraud.
  • He reportedly helped execute the loss-hiding scheme and failed to alert the board.[3]
  • Olympus's new president blamed Yamada alongside Kikukawa and Mori as the trio was responsible for the cover-up, and the company considered criminal complaints against them.[10]
  • The scenario indicates a serious betrayal of the internal audit function, as Yamada should have been an independent check but instead helped conceal losses.

Olympus's External Auditors (KPMG AZSA and Ernst & Young ShinNihon):

KPMG: Former Auditors at Olympus
E&Y: Latter Auditors at Olympus
  • Two major audit firms were involved over the years. KPMG AZSA was Olympus's auditor until 2009, and Ernst & Young ShinNihon LLC took over from 2009 onwards.[13]
  • These auditors signed off on Olympus's financial statements throughout the period of the fraud, raising questions about how the scheme escaped detection for so long.[2]
  • In fact, in 2009, KPMG raised concerns about the unusual accounting for the Gyrus acquisition, particularly the unknown nature of a Cayman Islands fund, Axam, that received a large fee, and expressed disagreement with the accounting treatment used by Olympus management. Olympus's response was to remove KPMG as auditor—without disclosing the true reason—and replace it with E&Y.
  • Ernst & Young also noted issues with the Gyrus deal during its audits but ultimately issued clean audit opinions for Olympus's consolidated accounts.[3]

External Stakeholders (Regulators and Shareholders):

  • The Olympus scandal also drew in regulators and shareholders as key players once the fraud was revealed.
  • The Financial Services Agency (FSA) in Japan started an investigation to see if the inspectors were negligent. Law enforcement agencies in Japan, the UK, and the U.S., such as the Serious Fraud Office and FBI, also started investigations because the case involved people from different countries.[6][14]
  • The Tokyo Stock Exchange monitored whether Olympus would need to be delisted for its misconduct.[4]
  • Meanwhile, major shareholders—especially foreign institutional investors—became vocal. For example, Southeastern Asset Management with almost 5% stake, Olympus's largest foreign shareholder, and others demanded the resignation of the entire board in light of Olympus's admissions.[3]
  • These investors argued that either the board knew about the fraud and thus was non-compliant or they were ignorant and incompetent, and in either case, new governance was needed.[7]
  • Shareholder pressure and public scrutiny were instrumental in forcing leadership changes at Olympus and highlighted the board's accountability to owners.[4][15]

Governance Failure:

The Olympus scandal revealed corporate governance flaws. Everything from the boardroom to auditors and regulatory oversight failed to protect the corporation against fraud. Governance mistakes include:

Board's Lack Oversight and Independence Internal Controls and Audit Failures Regulatory and Governance System Gaps
  1. Olympus's board failed to oversee management and protect shareholder interest. Board composition was a crucial factor.
  2. At the time, 12 of 15 board members were Olympus executives, while only 3 were outsiders, with one not genuinely independent by international standards.
  3. This board made Olympus vulnerable to groupthink.
  4. No significant independent voices questioned fraudulent transactions or challenged the CEO.
  5. When CEO Woodford investigated suspected payments, the board sided with management and fired the whistleblower, not the wrongdoers.[2]
  6. A significant governance breakdown occurred when the board prioritized loyalty or face-saving over transparency and fiduciary duty.
  1. Olympus' internal controls failed.
  2. The Audit Board head, Hideo Yamada, was involved in a setting that compromised the company's internal audit function.[3]
  3. Instead of monitoring losses, the internal auditor colluded to hide them.
  4. Without appropriate internal monitoring, management distorted financial statements without detection.
  5. The standing corporate auditors of Olympus had the responsibility to scrutinize the accounting, a feature of Japanese governance that sets them apart from foreign auditors, but they fell prey to manipulation.[16]
  6. By overlooking or approving the fraudulent accounting, some Olympus employees disregarded their fiduciary duties.
  7. Several internal auditors and accounting authorities were found liable for billions of yen in damages for failing to prevent the fraud.[2]
  1. The Olympus case also exposed governance system gaps, particularly in Japan's corporate governance environment.[17]
  2. Regulatory monitoring and stock exchange standards failed to prevent or identify Olympus' wrongdoing.[13]
  3. Olympus officially met the 2010 Tokyo Stock Exchange requirement for at least one independent director or auditor on company boards, but with little influence.
  4. The initial accusation came from Facta, an independent journal, and Woodford pursued it, revealing the suppression of internal voices.
  5. Shareholderspressured the corporation to address the issue, emphasizing accountability rather than penalizing the company.
  6. The company laid off Woodford for voicing concerns without internal protection, underscoring the regulatory gap in whistleblower protection.[8]

Major Responsible Entities:

Many parties contributed to Olympus's governance failure, but the trio of top executives who plotted and perpetuated the scam were most accountable. The company's inquiry identified former CEO/Chairman Tsuyoshi Kikukawa, Executive VP Hisashi Mori, and internal auditor Hideo Yamada as the main cover-up parties.[13]

Among these, Tsuyoshi Kikukawa is most responsible for the governance breakdown. Kikukawa set the "tone at the top" as Olympus's CEO for ten years and chairman afterward.

  • He introduced or endorsed the policy of burying losses off the books.
  • Michael Woodford claimed Kikukawa ruled the corporation without oversight, fostering an environment where his choices were uncontested.
  • Indeed, under Kikukawa, the board was full of insiders, and accountability systems were corrupted to hide bad news.
  • This single person's power allowed the scam to continue.
  • Kikukawa attempted to mislead stakeholders by dismissing media stories as rumours and firing Woodford instead of addressing serious concerns.[18]

Hisashi Mori and Hideo Yamada, co-conspirators, are also responsible.

  • Mori was responsible for managing the program, implementing financial gimmicks, and keeping secret documents.
  • In his role as an auditor, Yamada compromised ethics and governance by collaborating in fraud instead of acting as a check.

The executive team is responsible since Kikukawa alone could not have concealed the losses without a few loyal higher management employees and outside partners.

Key Stakeholders

Fall of Olympus's Stock Price during 2011 (Created by Team 2v, referred to https://finance.yahoo.com/quote/7733.T/)

Investors

  • With share prices plummeting by 75-80% after the Olympus fraud was reported by the media[2] investors were hit with major losses.
  • A coalition of more than 60 institutional investors filed a lawsuit against Olympus, and after four years in court they were able to recover 45% of their original losses in 2016.[19]
  • There were still significant efforts made by a dedicated investor base to recover Olympus to its former status. Due to Olympus being a global market share leader in endoscopy, and the nature of their core business activities having high barriers to entry, Olympus still had a stable flow of medical profits which certain long-term investors valued.[20]
  • There were preventative measures bolstered by loyal shareholders to avoid Olympus getting delisted from the Tokyo Stock Exchange, such as shareholder meetings to elect new management.[20]

Employees and Management

  • During the time period when employees were engaged in 'Tobashi' to cover up losses, there was a work culture of fear from management and silencing of questions, creating pressure for fraud to arise.[21]
  • Many workers faced job insecurity in the aftermath of the scandal, with an announcement in 2012 that Olympus would cut 7% of Olympus' global workforce and remove 12 of it's 30 plants by 2015.[22]
  • A new CEO, Chairman, and President were appointed following the scandal, where they restructured the previous corporate governance[23] to strengthen independence and implement stronger internal controls.
  • Olympus committed to a board restructuring, which consisted of 15 board members, with 11 coming outside of the company, while the rest were from within.[24]

Customers

  • The accounting fraud hindered Olympus' reputation to customers, as they became more uncertain over the value of their products, with there being a risk of Olympus dissolving or being sold off to another competitor.[25]
  • Olympus' positioning in the medical equipment sector, specifically endoscopy remained solid in midst of the scandal, and they were still generating consistent profits,[20] as hospitals prioritized quality over their supplier's reputations.
  • The accounting fraud still left lasting impacts on their profits earnt from their photographic business, shaking reputation with customers. Olympus were unable to keep steady profits, exacerbated by smartphone cameras improving quickly in quality.[26]

External Auditors

  • KPMG AZSA were Olympus' auditors from 2002 until 2009, but were removed and replaced by Ernst & Young ShinNihon when they began questioning about Olympus' goodwill accounting.[6]
  • It would be expected Japanese investors would lose trust with the external auditors (KPMG AZSA and Ernst & Young ShinNihon) involved in providing clean audit reports to Olympus during their scandal, and they would experience negative spillover effects from giving Olympus clean audit reports. In a study done by Numata and Takeda (2010), using event study and multivariate regression analysis, they observed no significant changes in the reputation of the auditors (KPMG AZSA and Ernst & Young ShinNihon) in Japan.[27]
  • Japanese investors perceived the scandal as an expected case of audit failure, recognizing auditors were just following standard procedures.[27]
  • In Japan there are no legal penalties imposed on auditors for their failure to detect material misstatements in financial statements, cultivating an environment where Japanese investors expect lower audit quality, and considered the Olympus scandal insignificant to alter public perception of KPMG AZSA and Ernst & Young ShinNihon.[27]

Current Status of the Case and Pending Lawsuits:

When the Olympus scandal of 2011 finally unfolded, multiple lawsuits across the globe emerged. The discoveries of the case led to legal proceedings being filed directly against Olympus Corp, as well as the many executives who were responsible for the misrepresentation of the company’s financial health[28][29][30][31]. These claims were filed by financial regulators, institutional investors, and shareholders[28][29][30][31].

The majority of lawsuits that followed the investigation have been resolved, resulting in significant settlements and penalties[29][31][32]. The key players involved included Tsuyoshi Kikukawa, former Chairman, President, and CEO; Hisashi Mori, former Vice President; and Hideo Yamada, the key auditor involved in the masking of their losses[33]. These players were prosecuted and sentenced in Japan, however, received lenient consequences in the form of suspended prison sentences rather than actual prison time[34]. Olympus, on the other hand, avoided criminal charges, but faced heavy financial and reputational damages instead[32][33].

As years passed, many institutional investors continued to file lawsuits against Olympus Corp as they felt they were never proportionately compensated for their losses[31]. Since the scandal, Olympus has improved their own regulations and corporate governance to help prevent any future governance failures[35].

As of today, there are no major pending lawsuits, but it is quite possible that some civil claims or investor lawsuits have continued to arise and are ongoing.

Results of Concluded Lawsuits:

Legal Repercussions for Olympus

Japan Tokyo District Court
  • In 2013, Olympus was ordered to pay 700 million yen (around $7 million USD) in fines[32] for falsifying their financial accounts.

Banks

  • In April of 2014, six Japanese trust banks filed a lawsuit seeking damages of 27.9 billion yen (273 million USD) in damages relating to the 2011 scandal[36].
  • The 6 banks included State Street Trust and Banking Co LTD, Mitsubishi UFJ Trust and Banking Corp, and The Nomura Trust and Banking Co.[28]
United States United States Department of Justice - Anti-Kickback Violations
  • Olympus Corporation of the Americas (OCA) was ordered to pay $646 million by the United States Department of Justice "for conspiracy to violate the Anti-Kickback Statute (AKS)[29]".
  • This statute "prohibits payment to induce purchase paid for by federal health care programs[29]."
  • "The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving hospitals and doctors kickbacks[29]".
  • OCA engaged into a three year deferred prosecution agreement (DPA) that would prevent them from conviction if they complied to the "reform and compliance requirements outlined in the agreement[29]."
  • The requirements of the DPA are listed as follows:
    • "OCA must enhance its compliance training and maintain an effective compliance program;
    • OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing;
    • OCA's chief executive officer and board of directors must certify annually that the program is effective; and
    • OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay[29]."
  • OCA will be delegated $623.2 million, while Olympus Latin Americas (OLA) has been ordered to pay $22.8 million of the total $646 million[29].
  • Of the $623.2 million, $312.4 million will be paid as a criminal penalty, while the remaining $310.8 million will be paid to settle civil claims "under the federal and various state False Claims Act (FCA)[29]".
  • "The federal share of the civil settlement is $267,288,323 and Olympus will pay $43,512,053 to participating states[29]".
United Kingdom Serious Fraud Office (SFO)
  • In 2013, the SFO prosecuted Olympus Corporation, and their wholly owned UK subsidiary Gyrus, charging them under the s501(1) of the Companies Act 2006 for misleading Gyrus auditors with respect to their audit process prior to the acquisition[30].
  • Due to the statues, s501 and s499, pertaining to the actions of an individual and not a corporation which was brought to light by the defendants council, charges were dropped[30].
  • As for the individual executives responsible for the scandal, the SFO noted that they could not be prosecuted as Japan does not extradite their nationals[30].
Institutional Investors
  • In March of 2014, the details of an out of court settlement was finally agreed upon in Japan to pay institutional investors 11 billion yen ($92 million) over accounting fraud allegations.[31]

Legal Repercussions for Key Players

Tsuyoshi Kikukawa (former Chairman/President/CEO)
  • On July 3, 2013 Kikukawa received a 3 year suspended sentence and a 5 year probation period.[37]
  • In April of 2017, Kikukawa, along with other executives, were found jointly liable for $529 million payable to Olympus.[4]
Hisashi Mori (former Vice President)
  • On July 3, 2013 Mori received a 2.5 year suspended sentence.[37]
  • In April of 2017, Kikukawa, along with other executives, were found jointly liable for $529 million payable to Olympus.[4]
Hideo Yamada (former Auditor)
  • On July 3, 2013 Yamada received a 3 year suspended sentence.[37]
  • In April of 2017, Kikukawa, along with other executives, were found jointly liable for $529 million payable to Olympus.[4]

To put these sentences into perspective, Jeffrey Skilling, co-founder of Enron, was sentenced to 24 years in prison in 2006[37]. Bernard Ebbers, who constructed the largest accounting scandal in US history as Chairman of WorldCom was sentenced to 25 years in prison in 2005[37]. These convictions occurred in a similar time to the Olympus scandal. The lenient sentences the Olympus executives received led many to question corporate governance in Japan[37].

Since the Olympus scandal over fraudulent accounting, Japan has reformed and improved their Corporate Governance Code "that establishes the principles for good corporate governance, including transparency, risk management, and the responsibility of companies to take appropriate measure to address sustainability issues[38]."

Where Are They Now:

Olympus Corporation has evolved into a global leader in medical technology and remains active and headquartered in Tokyo, Japan, with operations spanning nearly 38 countries. In 2013, shortly after the scandal came to light, Olympus Corp and Sony, a Japanese manufacturer of electronics, announced a medical business venture with hopes to use "Sony's cutting edge technology[39]" "to bring high-quality medical care to as many people as possible[39]. To begin 2021's new year, Olympus finalized the sale of their imaging department to OM Digital Solutions, a Japanese Manufacturer based out of Japan[40]. In September of 2022, "Sony Corporation, Olympus Corporation, and Sony Olympus Medical Solutions Inc.[41]" "announced today that the three companies have developed a surgical endoscopy system that offers surgical visualization features including 4K, 3D, and infrared[41]". As of March 2025, the company is actively operational, with recent announcements highlighting its focus on innovation. Recently, on October 25, 2024, Olympus announced CE approval for three cloud based AI medical devices with a plan to launch an AI powered endoscopy ecosystem in 2025[42]. Olympus employs approximately 29,000 people globally, with its U.S. subsidiary in Center Valley, Pennsylvania, employing over 4,800 people[43]. The company has been recognized for sustainability, being included in indices like Dow Jones Sustainability World Index. In addition, the updates about the key players in the scandal are mentioned below.

Entity Current Status Location
Olympus Corporation (The Company) Active operations, focusing on innovations and production. Still headquartered in Tokyo, Japan
Tsuyoshi Kikukawa No recent public presence found since judgement for damages on former company in 2019[44]. Unknown
Michael Woodford Providing consulting services to businesses, giving talks revolving whistleblower protection and Olympus, and involvement in his charitable activities.[45] London, U.K.
Hisashi Mori No recent public presence found since judgement for damages on former company in 2019[44]. Unknown
Hideo Yamada No recent public presence found since judgement for damages on former company in 2019[44]. Unknown

Olympus Corporation

Olympus SP-560UZ Digital Camera
  • Olympus decided to leave the photography side of their business in 2020 after profits remained stagnant for years, possibly tied to loss in consumer trust following the accounting fraud.[26]
  • They confirmed the sale of their camera division to Japan Industrial Partners (JIP) in the beginning of 2021. The acquisition incorporates their whole business, including intangible assets like research and development.[46]
  • JIP created their own separate entity to expand their camera division, OM Digital Solutions Corporation, and has their headquarters located in Hachioji, Tokyo, while keeping production facilities in Vietnam.[47]

Tsuyoshi Kikukawa:

  • In October 2011, he stepped down from his position amid the scandal[48].
  • The sentence was part of a broader legal action, with Olympus suing him and other executives for compensation in 2012, seeking 90 billion yen in damages[49].
  • In 2013, he was sentenced to a three-year suspended jail term for falsifying accounts[1].
  • Since then, there is no public information on his current activities or whereabouts, suggesting he has retired from public life.
  • It appears likely that he is now living privately, possibly in Japan, since he hasn't been seen in public or for work.
  • In 2019, Kikukawa, along with other former executives were found liable for damages aginst Olympus and were to pay JPY 59,402,828,936 (then worth $542,828,670 USD)

Michael Woodford:

  • After the scandal, Woodford believed he was positioned well to be reinstated as CEO from shareholder support building, however, he ultimately wasn't able to secure institutional support, and conceded in January of 2012.[50]
  • He fled Japan, paranoid he upset Japanese organized crime groups, as there was suspicion of their involvement in Olympus' concealment of their losses.[50]
  • For his diligence in asking questions, and bravery for whistleblowing, Woodford was rewarded as the 2011 business person of the year recognized by the Sun, the Sunday Times, and the Independent[45], as well as Person of the Year recognized by the Financial Times in March 2012.[51]
  • Woodford has spent most of his time following the scandal sharing insights he gained from Olympus, and growing his human rights and road safety charities.[45]
  • He has been working as an independent consultant for companies across the U.K., offering advice to prevent similar scandals.[45]
  • Woodford wrote his own book recounting his story, and how he uncovered the deep-rooted fraud within Olympus, published by Penguin Publishing in 2014.[52]

Hisashi Mori:

  • In 2011, Hisashi Mori was dismissed from his position following the uncovering of the scandal[53].
  • In 2013, he was sentenced to a three-year suspended sentence[1].
  • In 2019, Mori, along with other former executives were found liable for damages against Olympus and were to pay JPY 59,402,828,936 (then worth $542,828,670 USD)[44].
  • Since then, there is no publicly available information on his current whereabouts or situation.

Hideo Yamada:

  • In 2013, he was sentenced to a three-year suspended jail term[1].
  • Olympus sued him and other executives for compensation in 2012, as part of efforts to address the scandal's fallout, seeking 90 billion yen in damages[49].
  • In 2019, Yamada, along with other former executives was found liable for damages against Olympus and was to pay JPY 59,402,828,936 (then worth $542,828,670 USD).
  • There is no recent public information on Yamada's current status, suggesting he, too, has withdrawn from public life.
  • Given his role as corporate auditor and the scandal's aftermath, it is probable that he has retired, with no further professional or public activities documented.

References:

  1. ↑ 1.0 1.1 1.2 1.3 "Olympus former chairman sentenced". International Accounting Bulletin. July 4, 2013.
  2. ↑ 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 "Olympus scandal". Wikipedia. Nov 11, 2011.
  3. ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 Elam, Dennis (January 2016). "Olympus Imaging Fraud Scandal: A Case Study". ResearchGate.
  4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 "Olympus scandal: Former bosses to pay $529m over fraud". BBC NEWS. April 28, 2017.
  5. ↑ Abdul Rehman Bukhari, Syed (2019). "Olympus Fraud Case Study". Studocu.
  6. ↑ 6.0 6.1 6.2 6.3 Kaye, Richard; Frouville, Sebastian De (Jan 14, 2025). "The Olympus of Fraud". COMGEST.
  7. ↑ 7.0 7.1 Venkat, CFA, Padma (Nov 22, 2011). "Blurry Images: Investors, Regulators, Auditors Missed Olympus Warning Signs". CFA Institute.
  8. ↑ 8.0 8.1 8.2 8.3 8.4 Craft, Lucy (November 16, 2011). "Olympus Scandal Could Hasten Disclosure Changes". NPR Business.
  9. ↑ "https://hbr.org/2012/12/at-olympus-and-goldman-sachs-two-very-different" (PDF). Olympus Global. Dec 06, 2011. Check date values in: |date= (help); External link in |title= (help)
  10. ↑ 10.0 10.1 "Former Bank Executive Arrested for Assisting Olympus Corporation in Several-Hundred-Million-Dollar Accounting Fraud". The Federal Bureau of Investigation (FBI). 2012.
  11. ↑ Yamaguchi, Mari (March 7, 2012). "Japanese prosecutors charge former Olympus chairman, 5 others in coverup of massive losses". Global News.
  12. ↑ Heineman, Ben W. (December 6, 2012). "At Olympus and Goldman Sachs, Two Very Different Whistleblowers". Harvard Business Review.
  13. ↑ 13.0 13.1 13.2 13.3 Morgan, Anita R.; Burnside, Cori (2014). "Olympus Corporation Financial Statement Fraud Case Study: The Role That National Culture Plays On Detecting And Deterring Fraud" (PDF). CORE: Journal of Business Case Studies.
  14. ↑ "Former Bank Executive Pleads Guilty In Connection With Accounting Fraud At Olympus Corporation". United States Attorney's Office. Sept 18, 2013. Check date values in: |date= (help)
  15. ↑ E. Aronson, Bruce (Dec 4, 2012). "The Olympus Scandal and Corporate Governance Reform: Can Japan Find a Middle Ground between the Board Monitoring Model and Management Model?". SSRN.
  16. ↑ McKenna, Francine (Jan 02, 2012). "The Olympus Fraud Dissected". Forbes. Check date values in: |date= (help)
  17. ↑ ILIEVA, Maria (2024). "The Olympus scandal – the dark side of social networks and corporate culture" (PDF). White Rose University Consortium.
  18. ↑ Prusa, Igor (Dec 23, 2016). "Corporate Scandal In Japan And The Case Study Of Olympus". JapaneseStudies.
  19. ↑ "Olympus (Japan): Deminor's clients achieve the highest recovery". Deminor. December 28, 2016.
  20. ↑ 20.0 20.1 20.2 Devine, Ethan (January 18, 2012). "The way to save olympus; japan inc. discovers that foreign shareholders are part of the solution, not part of the problem". New York, N.Y.: Dow Jones & Company Inc.
  21. ↑ Jennings, Marianne (2012). "THE STORY OF OLYMPUS: MISSING INTERNAL CONTROLS AND A CULTURE OF FEAR, ODDITIES, AND RELUCTANCE ON GOVERNANCE REFORMS". Corporate Finance Review. Vol. 16, Iss. 5: Pages 34-37.
  22. ↑ "Olympus to cut 2,700 workers, restructure". The Japan Times. June 9, 2012.
  23. ↑ Dutta, Saurav; Caplan, Dennis; Marcinko, David (April 23, 2014). "Blurred Vision, Perilous Future: Management Fraud at Olympus". Issues in Accounting Education, Forthcoming.
  24. ↑ Soble, Jonathan (February 27, 2012). "Scandal-hit Olympus unveils new management". CNN Business. Retrieved March 22, 2025.
  25. ↑ Elam, Dennis (2014). "Olympus Imaging Fraud Scandal: A Case Study" (PDF). American Journal Of Business Education. Volume 7, Number 4: pp. 329. line feed character in |title= at position 31 (help)CS1 maint: extra text (link)
  26. ↑ 26.0 26.1 Sparrow, Mark (June 25, 2020). "Olympus Exits The Camera Market After Three Years Without A Profit". Forbes. Retrieved March 18, 2025.
  27. ↑ 27.0 27.1 27.2 Frendy; Hu, Dan (December, 2014). "Japanese stock market reaction to announcements of news affecting auditors' reputation: The case of the Olympus fraud". Journal of Contemporary Accounting & Economics. Volume 10, Issue 3: Pages 206-224. Check date values in: |date= (help)
  28. ↑ 28.0 28.1 28.2 "Japan's Olympus sued by six banks over accounting fraud". 2014, April 9. Check date values in: |date= (help)
  29. ↑ 29.00 29.01 29.02 29.03 29.04 29.05 29.06 29.07 29.08 29.09 29.10 "Medical Equipment Company Will Pay $646 Million for Making Illegal Payments to Doctors and Hospitals in United States and Latin America". 2016, March 1. Check date values in: |date= (help)
  30. ↑ 30.0 30.1 30.2 30.3 30.4 Fletcher, Rod; Meakin, Kate; Cogman, Susannah (2016, January 8). "SFO v. Olympus: application of the offence of misleading the auditors". Check date values in: |date= (help)
  31. ↑ 31.0 31.1 31.2 31.3 31.4 Jonathan, Stempel (2015, March 27). "Olympus to pay $92 million to resolve lawsuits over accounting". Check date values in: |date= (help)
  32. ↑ 32.0 32.1 32.2 Tabuchi, Hiroko (2013, July 3). "Suspended Sentences in Olympus Fraud Case". Check date values in: |date= (help)
  33. ↑ 33.0 33.1 Stewart-Smith, Hana (2011, December 7). "Olympus' downfall: Corruption, scandal, and 'rotten' management". Check date values in: |date= (help)
  34. ↑ "Suspended jail sentences for ex-Olympus execs". 2013, July 30. Check date values in: |date= (help)
  35. ↑ "https://www.olympus-global.com/ir/data/announcement/pdf/nr120420e.pdf" (PDF). 2012, April 20. Check date values in: |date= (help); External link in |title= (help)
  36. ↑ Knight, Sophie (2014, April 8). "Olympus says being sued by six banks for $273 million over 2011 scandal". Check date values in: |date= (help)
  37. ↑ 37.0 37.1 37.2 37.3 37.4 37.5 Kaye, Richard; de Frouville, Sebastien (2025, January 14). "The Olympus of fraud". Check date values in: |date= (help)
  38. ↑ Japanese Exchange Group (2018). "Corporate Governance Code (Japan)".
  39. ↑ 39.0 39.1 Sony Olympus Medical Solutions Inc. (2013, April 16). "Establishment of Sony Olympus Medical Solutions Inc". Check date values in: |date= (help)
  40. ↑ Burgett, Gannon (2021, January 5). "Update: The end of an era: Olympus confirms it's completed the sale of its imaging business to JIP". Check date values in: |date= (help)
  41. ↑ 41.0 41.1 Sony Olympus Medical Solutions Inc.; Sony Corporation; Olympus Corporation (2022, September 14). "Sony, Olympus, and Sony Olympus Medical Solutions Collaborated in the Development of a Surgical Endoscopy System that Supports 4K, 3D and Infrared (IR) Imaging*1 Features". Check date values in: |date= (help)
  42. ↑ Hamburg (Oct 15, 2024). "Olympus Announces CE Approval for Three Cloud-based AI Medical Devices and Announces Plans for Launch of AI-Powered Endoscopy Ecosystem in 2025". Olympus Global Homepage.
  43. ↑ "Business Overview". Olympus America. Retrieved Mar 20, 2025.
  44. ↑ 44.0 44.1 44.2 44.3 "Olympus-Global" (PDF). 2019, May 16. Check date values in: |date= (help)
  45. ↑ 45.0 45.1 45.2 45.3 Ryall, Julian (February 3, 2014). "Japan: Business as usual, but not for Olympus whistleblower Michael Woodford". Japan Today. Retrieved March 22, 2025.
  46. ↑ Burgett, Gannon (September 30, 2022). "Olympus finalizes deal with JIP to sell its Imaging business". Digital Photography Review. Retrieved March 22, 2025.
  47. ↑ Fisher, Jim (September 30, 2020). "What the Olympus Sale Means for Photographers". PC Mag.
  48. ↑ "Olympus chairman Tsuyoshi Kikukawa quits amid scandal". BBC News. Oct 26, 2011.
  49. ↑ 49.0 49.1 "Olympus sues current president, ex-directors over $1.7 bn fraud". Firstpost. Jan 9, 2012.
  50. ↑ 50.0 50.1 Lewis, Leo (December 11, 2012). "The outsider". Prospect. Retrieved March 25, 2025.
  51. ↑ "FT ArcelorMittal awards honour boldest business leaders in 2012". Financial Times. Retrieved March 22, 2025.
  52. ↑ "Exposure: Inside the Olympus Scandal: How I Went from CEO to Whistleblower". Google Books.
  53. ↑ Hawkes, Alex; Goodley, Simon (2011, November 8). "Olympus admits hiding losses for 20 years". Check date values in: |date= (help)

Responsible Use of AI:

Section of the Wikipedia How was AI[1] Used? How was the information verified?
Timeline The individual sources were researched by the team and the information was gathered by making subsequent notes which were then inputted to AI to get a better chronological order of the events happened. The response was then used to form a better flow of the section. Initially the information given to AI was manually researched, however, after getting the response, the figures were matched with the initial references to check if they were accurate. AI mostly helped in better organization of data and not creating data.
Key Players and Roles After looking at the existing wikipedia of the Olympus scandal, AI was asked to give a list of key players with a brief description for each. After getting the list, individual names were researched and further in depth information was gathered. The brief description was matched with various individual resources and the data that did not overlap was not considered (quite expected from AI resources).
Governance Failures Based on the notes that were taken from the references after research, ChatGPT was asked to give the same answer with around 50 more words. The additional words were scrutinized well before finally adding them into wiki. The response given by ChatGPT was mainly what the team added in its prompt, apart from 2-3 sentences. The additional information was then matched with other credible resources available online, and after verification, the whole section was added into the wiki after paraphrasing.
Major Responsible Entities The data between key players and major responsible entities was little overlapping, so AI was used only to differentiate between what will each sub section have different in its content. Based on the explanation given, further research was done. No verification was required as there was no data was used in this section of the wiki that was given by AI.
Key Stakeholders ChatGPT was asked to provide potential key stakeholders related to the Olympus fraud, and how they were impacted. AI provided insight that the share price dropped, losing the trust of investors, employees faced job insecurity, and EY and KPMG faced scrutiny. When asked for sources ChatGPT was unable to provide any substantial links, so it was important we verified to disproved ChatGPT's ideas. There were plenty of sources available that mention how Olympus' stock price dropped, we validated through Olympus' own Wikipedia, but we found that some investors still believed in the long-term longevity of Olympus. We found that employees faced job insecurity from cuts announced in 2012. As for the external auditors, we found a study done showing no significant change in investors not trusting firms audited by KPMG and EY, as investors rationally recognized it was more so an issue of federal regulations rather than standards not being followed.
Current Status of the Case and Pending Lawsuits ChatGPT was asked to provide a summary of the current status of all pending lawsuits regarding the Olympus scandal. From there, ChatGPT was asked to provide the sources that the information derived from. Disappointedly, ChatGPT was unable to provide direct sources, but rather generic Google searches to base the research out of. This is where the beginning of the research began. No information regarding the case facts was taken directly from ChatGPT.
Results of Concluded Lawsuits ChatGPT was not used in this section. N/A
Where are they now? A manual research was done to find the current updates and whereabouts of Tsuyoshi Kikukawa and Hideo Yamada. However, when the team could not find much recent information, AI was taken into consideration. But, ChatGPT also could not find much relevant information, so the current status of these entities remains unknown. AI could not provide any information that the team could reasonably use in this Wiki, so no verification required for the information on Tsuyoshi Kikukawa and Hideo Yamada.
  1. ↑ "ChatGPT".
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