Olympus Prez to resign after accounting fraud of $1.7 billion

An Olympus Corp panel plans to recommend the endoscope maker sue current and former executives for more than 90 billion yen ($1.2 billion, 777.5 million pounds) in scandal-related damages, and its president, Shuichi Takayama, is expected to resign by the end of the month, media reported on Sunday.

The panel, which is expected to make an announcement later on Sunday, determined that Takayama and five other current company executives had breached fiduciary duty by not spotting a 13-year accounting fraud that hid losses of $1.7 billion and thinned out the 92-year-old firm's net assets, Kyodo News Agency said.

[caption id="attachment_175366" align="alignleft" width="380" caption="Olympus Corp President Shuichi Takayama attends a news conference in Tokyo. Reuters"][/caption]

Takayama, who took the helm of the medical device maker in October, is expected to announce his resignation as early as Monday, Kyodo said.

Olympus could not be immediately reached for comment.

Takayama had resisted calls that he resign, saying he was not involved with the loss cover-up and that his first responsibility was to rebuild the company's business after the scandal wiped out 60 percent of its market capitalisation.

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The company's main lender and major shareholder, Sumitomo Mitsui Financial Group, has backed existing management and its efforts to seek a capital tie-up to shore up its finances.

Takayama replaced former president and chairman Tsuyoshi Kikukawa in October, after ousted British CEO Michael Woodford blew the whistle on Kikukawa's involvement in the accounting fraud.

Woodford on Friday dropped his bid to return to lead Olympus, and said he would sue the company for unfair dismissal.

The company is likely to pick Takayama's successor from among the three board members the panel said were not responsible for the cover-up -- Masataka Suzuki, Kazuhiro Watanabe and Shinichi Nishigaki, Kyodo said.

The panel plans to recommend the company sue more than 10 current and former executives, including Kikukawa, former vice president Hisashi Mori and former auditor Hideo Yamada, Kyodo and other media said.

Reuters