Olympus Executives Arrested

Greg Tarr -- TWICE, 2/16/2012

Tokyo - Japanese prosecutors arrested seven men, including former Olympus chairman Tsuyoshi Kikukawa, following investigations into an alleged $1.7 billion in accounting fraud surrounding the medical and photographic hardware and optics manufacturer.

 The former Olympus executives were charged with allegedly filing false financial reports in 2007 and 2008.

Others Olympus executives arrested included former executive VP Hisashi Mori and former auditor Hideo Yamada, according published reports here. A group of financial advisors who assisted in the cover-up were also arrested.

Olympus issued a statement in Japan Thursday saying: "We are deeply concerned about the seriousness of this situation. In order to find the full facts, we will continue to fully cooperate with law enforcement authorities in the investigation."

The investigations into the company started after former president Michael Woodford was fired in October for questioning Kikukawa, Mori and Yamada about a series of irregular fee payments and over priced transaction payments.

After Woodford reported the activity, a special audit was made uncovering $1.7 billion in hidden losses resulting from failed investments by the company.

Kikukawa, Mori and Yamada resigned, and other investigations are ongoing in Tokyo, London and New York.

According to reports, the members of Olympus board of directors, led by President Shuichi Takayama, are expected to step down at on April 20, when new management is expected to be named.