Olympus chief quits over fees row

Japanese camera maker Olympus said yesterday that Tsuyoshi Kikukawa has resigned as chairman and president, in the wake of a scandal triggered by the sacking of the firm’s British CEO.

Kikukawa’s resignation comes less than two weeks after he took control of the company following the ousting of former president and chief executive Michael Woodford.

Briton Woodford contended that he was removed after querying the size of payments made by Olympus in deals between 2006 and 2008.

Kikukawa will become a director without executive rights, the company said in a statement. Director Shuichi Takayama will replace him as president.

“As we have troubled our customers, business partners and shareholders over a series of press reports and a slump in share prices, chairman and president Tsuyoshi Kikukawa today returned his titles as well as his right to representation,” the Olympus statement said.

Olympus shares have plunged, losing about half their value since the ousting of Woodford on October 14, with the questioned payments falling under the media spotlight.

Among the deals queried by Woodford was the $1.92 billion acquisition of British medical instruments company Gyrus Group and the $687 million that Olympus has admitted it paid an adviser on the purchase.

Woodford commissioned a report on the deal from accounting firm PricewaterhouseCoopers that queried why the fee was so high.

It totalled more than a third of the company’s purchase price, much larger than the one or two per cent normally charged in acquisition deals.

Olympus on Tuesday declined to comment on media reports that the FBI was investigating the scandal involving the near $700 million advisory fee payment.

Woodford was dismissed only six months after being appointed president and two weeks after he was also named chief executive.

The 30-year company veteran, Olympus’ first non-Japanese president and chief executive, said he was removed after he wrote to Kikukawa and urged him to resign over the payments, citing major governance concerns.

Olympus has denied any wrongdoing and repeatedly blamed Woodford’s demotion on “a big gap” between him and other directors on management and strategy, instead of his concerns over the deals.