Saturday May 26, 2012

JAPAN NEWS AND DISCUSSION

Former Olympus president Kikukawa, 6 others arrested

Crime Feb. 16, 2012 - 06:35PM JST ( 39 )

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39 Comments

2

marcelitoFeb. 16, 2012 - 02:53PM JST

Better late than never I guess but the police sure seem to have taken their time on this ( as appears to be the norm here ) ....No doubt most of the incriminating evidence is gone and assets transferred or disposed of ( remember reading about Kikukawa promptly transferring ownership of his real estate holdings to other family members about a month or two ago if I,m not mistaken)...I,m sure the others have done the same. Nevertheless , will be interesting to see how this plays out.
1

ElvensilvanFeb. 16, 2012 - 03:17PM JST

I bet these oyajis were surprised when they were arrested. It has been many months since the scandal went public, and that they were even waiting for the Extraordinary General Meeting schduled for April 20.
11

namabiru4meFeb. 16, 2012 - 03:18PM JST

my guess....3 years, suspended sentence.
11

Sarcasm321Feb. 16, 2012 - 03:23PM JST

The phone rings at the Kikukawa house one morning:

Kikukawa: Hai, moshi-moshi

Police Chief: Ano, sumimasen desu ga, we'll be round to arrest you

K: Oh really? When?

PC: A week next Thursday. Is that okay?

K: Oh that'll be fine, I've nothing planned then.

PC: That's great! By the way, cold isn't it?

K: Sure is, take care you dont catch one!

PC oh, ah, I see what you did there, you made a funny, very good har har

K: Well bye for now and thanks for calling

PC Sure, see you next Thursday.
8

my2senseFeb. 16, 2012 - 03:27PM JST

6 corrupt geezers down... 6000 to go.
-28

anglootakuFeb. 16, 2012 - 03:39PM JST

But the Briton, the firm’s first non-Japanese president, did not win the backing of Japanese institutional investors and gave up a push to get his job back.

Seeing how he pushed the share price down and caused a fiasco..
3

ExportExpertFeb. 16, 2012 - 03:49PM JST

Slap on the wrist with a wet bus ticket, suspended for 6 months comin right up !
0

The Munya TimesFeb. 16, 2012 - 03:56PM JST

I am neither an economist, nor an expert, just trying to solve the puzzle. Olympus president shifted $1.7 billion of losses from balance sheet. Possible not alone, he had and still have his well paid team. They employed a foreigner with an expectation, that he will either cover and bring back the loss, or will be the scapegoat.

The man couldn't do and was not good for the way they wanted. He was quickly removed, but he didn't say thanks for that and alarmed the authorities in return.

There came a long, tasteless ugly game, in the end all b ecame losers with Kikukawa and the 6 others possibly facing legal procedure, possible jail.

Too bad that Woodford was not selectively stupid as they expected, i.e. smart enough to clean up the mess and bring back the lost money and even more for Kikukawas to spend, but stupid enough to find out and understand what was going on.

Is that so simple, did i see it right?
0

AqualungFeb. 16, 2012 - 04:04PM JST

Anybody have any details about how these transactions were fixing the balance sheet? Were the inflated fees never actually paid?
2

the_sheriffFeb. 16, 2012 - 04:05PM JST

I wonder if the Japanese Securities and Exchange Commission and/or the National Tax Agency will take this case as an impetus to investigate other companies.

I bet there are a lot of scared executives out there wondering the same thing.
0

ElvensilvanFeb. 16, 2012 - 04:10PM JST

I forgot the exact details of the case, but to make things short, Olympus covered up losses by declaring to be paying very big sums of money for some companies and legal representation fees.
2

sillygirlFeb. 16, 2012 - 04:34PM JST

i am happy to hear this. it is rare for this kind of thing to happen and it gives me hope for a better Japan.
0

NessieFeb. 16, 2012 - 04:59PM JST

Hoping they follow the money/yak trail.
1

NetNinjaFeb. 16, 2012 - 05:19PM JST

oh HAPPY DAY!!! We're going to have a lot of fun with this one. Maybe they'll get cells next to Takafumi Horie. Is there like a corporate prison? There could be you know. Or at least a certain cell block. Horie, Aneha, The Olympus Execs, and maybe some politicians and their Yakuza buddies.
0

Ivan CoughanoffalotFeb. 16, 2012 - 05:29PM JST

Not one of these well-connected oyajis will see a single night in gaol. I'll bet a pound to a penny. This is, as always in this neck of the woods, a ritualised pantomime taking the place of genuine action.
0

viking68Feb. 16, 2012 - 05:32PM JST

NessieFEB. 16, 2012 - 04:59PM JST Hoping they follow the money/yak trail.

The last I heard, a reporter found one of the former Nomura guys at a very expensive Hong Kong condo. He was one of the ex-Nomura traders that left Nomura's Nagoya office after a Yak affiliation purge. The guy got irate and called the HK police on the reporter. So, the police should know at least where he was. I hadn't heard any more about him, so may be he gave them the slip by moving to his next mansion.

They couldn't find him in Florida. He gave his Florida mansion (US style, not a two bedroom apartment) to his wife (or soon to be ex-wife) and left.

I expect to see more than these seven people going to jail.
7

tokyokawasakiFeb. 16, 2012 - 05:33PM JST

Tip of the iceberg. The corrupt useless oyajis are the cancer of Japan, sadly there are 1000's of them in business and politics with their outdated and corrupt ways..

Reading that they at least got arrested (even if it is just for show) has made me smile.
0

viking68Feb. 16, 2012 - 05:41PM JST

AqualungFEB. 16, 2012 - 04:04PM JST Anybody have any details about how these transactions were fixing the balance sheet? Were the inflated fees never actually paid?

Looking to do a little loss hiding yourself?

I thought I did know at one point. But the details are fuzzy now.

Last year, the WSJ (and maybe the NYT) had a good discussion of the scheme.

It was a very popular scheme in the bubble years and big investment houses like Nomura were facilitating it. The law changed to make the practice criminal, but Olympus still used it.
1

Charles M BurnsFeb. 16, 2012 - 06:17PM JST

I'm surprised these guys haven't already done the honorable exit...
1

smithinjapanFeb. 16, 2012 - 06:37PM JST

If/when they get a jail sentence... THEN I'll clap my hands. Until then this little horse & pony show will continue. I hope the two who admitted to falsifying evidence did so so that they can rat the others out and give them MASSIVE jail time. I'm sure we'll hear about a few suspended sentences at least, but come on... give them at least 5 - 10 years each!
0

sillygirlFeb. 16, 2012 - 06:52PM JST

i have a feeling since this crossed international borders we may see something a little different. we can always hope.
2

CrazyJoeFeb. 16, 2012 - 07:25PM JST

Hope they're all indicted for the crimes they've committed.
1

smithinjapanFeb. 16, 2012 - 07:56PM JST

Any day now we're going to hear about how Kikugawa has taken on a 'Shimizu-like' stomach illness and should not be tried because he's sick.
3

David ChiangFeb. 16, 2012 - 07:57PM JST

I hope that this is the first step in changing Japanese business practice and ethics.
4

Ah_soFeb. 16, 2012 - 09:03PM JST

Seeing how he pushed the share price down and caused a fiasco..

anglootaku - Woodford neither pushed the share price down and nor caused a fiasco. Do you mean that he "revealed" or "exposed" the fiasco? The Olympus share price was artificial - all those who bought it were buying a lie and the scandal simply remained uncovered.

What Japan needs is men of courage, unafraid to call the truth. Woodford has exposed the leaders of Olympus and many of its shareholders to be liars and cowards.

I am glad the police have belatedly taken action. These men have brought shame on themselves and Japan.
1

thepersoniamnowFeb. 16, 2012 - 09:45PM JST

@ Sarcasm

Nice one!!! Made me laugh
0

avigatorFeb. 16, 2012 - 10:13PM JST

Mr Woodford brought light one of the malignant tumors of a cancer-stricken political and economic system. And even though removal surgery was proposed, one of the patients, in its own dementia and selfish behavior, refused treatment.
0

WilliBFeb. 16, 2012 - 10:44PM JST

Wow, I am honestly surprised. Looks like some gaiatsu worked here.
0

tmarieFeb. 17, 2012 - 12:20AM JST

Horse and pony show or not, this is something new in Japan. Regardless of whether they get off (which they probably will to be honest) they were arrested. HUGE steps in dealing with the rot that is at the core of Japanese businesses. Six down, thousands to go. Let the arresting begin!!
-1

MaitakeFeb. 17, 2012 - 12:37AM JST

Oh Happy Day!!!
2

sfjp330Feb. 17, 2012 - 06:25AM JST

With the problems of Olympus, Japan has been slowest in incorporating the concept of independent directors, even compared to other countries in Asia such as South Korea and China. Outside directors are needed to improve in preventing serious accounting fraud by corporate management. It is highly unlikely that the Japanese will respond with having majority of independent directors for public corporations. Japanese companies are attached to the notion of directors who are thoroughly familiar with the company's business and remain skeptical of the value of outside directors to the corporation. Given the results in Olympus, perhaps institutional investors and others concerned with good corporate governance practices should broaden their focus beyond the number of independent directors and their "degree" of independence. Maybe there should be greater consideration given to providing outside directors with the tools they need to act independently and fulfill their role of monitoring management. Ensuring the accuracy of financial statements is a fundamental issue of corporate governance, and there should be a meaningful Japanese response.
-2

anglootakuFeb. 17, 2012 - 11:49AM JST

@Ah_so

Fiasco from the whole exposé on the company, you have to see business from a Japanese point of view, You= Foreigner (regardless how good your Japanese is or credentials) doing anything to expose or bring down a system that works, whether its corrupt hidden dealings or open and transparent business (which wasn't the case) then of course your disturbing their way of doing business.

There is no pat on the back, here have your old CEO job.. he can forget it.. (its not the west don't forget) He bit the hand that feeds him, yes the government stepped in and did their job, but to Olympus they will always view him as an internal traitor. If he was the type to be kissing @ss then he probably would of got in on bribes and money under the table? but he did the right thing to be a whistle blower. Though he still has the western mentality of not seeing things from their point of view.
2

WakarimasenFeb. 17, 2012 - 01:27PM JST

I reckon this is just one instance among the many. Plenty Japanese companies engaged in book-cooking and still have long term liabilities in respect of those deals. Olympus error was to try and appear "with-it" by appointing a foreign CEO who wasn't prepred to cover up. Bet that won't be copied by other companies any time soon.....
0

ElvensilvanFeb. 17, 2012 - 03:27PM JST

Just wondering ... what will Olympus do now? Their president's under arrest, and there the new management board is not yet decided.

Dun dun dun dun!

The stock price seems to have dropped 14 yen, and the volume is also quite low.
0

NessieFeb. 17, 2012 - 03:38PM JST

The stock price seems to have dropped 14 yen, and the volume is also quite low.

I think the info has been factored into its price. The core business is still sound. Six weeks ago would have been the ideal time to buy.
0

Ah_soFeb. 18, 2012 - 04:11AM JST

anglootaku: thanks for clarifying your view - I thought that you meant that he had some personal responsibility for this - a view that some at Olympus and in other companies share.

I agree that that is how he is seen in Japan and I think it is sad that the investment establishment closed ranks around the current management rather than trust a disruptive foreigner.
0

ubikwitFeb. 18, 2012 - 04:56AM JST

yeah, but this is the obvious stuff.

what about the cayman island yakuza-front companies nomrua and wall st finance cretins??????????????????

that's where it gets interesting,
-1

NetNinjaFeb. 18, 2012 - 10:11AM JST

Well Ozawa just beat the system. He beat in fine fashion too. Forced a trial that he knew he would win when they threw out all the evidence. How will these guys beat the rap?
0

anglootakuFeb. 18, 2012 - 12:45PM JST

@Ah_so

No problem, it is easy for people to have assumptions when reading comments online, emails on keitai, online chats etc..

Had he been a Japanese for example, he could have been fired long ago if he had even opened his mouth, though Woodford strategized how he would change things under their radar and the turn of events are what had followed, he took careful steps to exposing the company.