Scandal-hit Olympus on Wednesday filed its delayed earnings report to the Tokyo Stock Exchange, avoiding an automatic delisting that would have wiped out the value of the 92-year-old company.
Shortly after the Tokyo bourse closed for the day, the company revealed it had lost 32.3 billion yen ($414 million) in the first half of the year, amid a massive accounting scandal that has badly tarnished the image of Japan Inc.
The loss by the camera and medical instrument maker compares with a net profit of 3.81 billion yen for the same period a year earlier.
Two months to the day after Olympus dumped British chief executive Michael Woodford for his complaints about apparent gaping holes in the balance sheet, the company pledged to mend its ways.
“It has been revealed that our company had announced false financial statements by delaying reporting losses from stocks and other investments,” it said in a statement.
“The third-party committee (established to probe the scandal) pointed to problems with our corporate governance.
“Our company will… try to carry out fundamental reforms in order to achieve recovery of trust as quickly as possible.”
Olympus said it could not issue an outlook for its earnings for 2011 as a whole because it could not yet determine how the problems would affect sales.
The 32.3 billion yen net loss this year was due mainly to one-time losses caused by market deterioration, Thai floods and a decline in the book value of its business assets, Dow Jones Newswires reported.
Olympus missed its initial November 14 deadline for releasing its latest earnings results. The Tokyo Stock Exchange had warned its shares would face delisting if the company failed to report them by December 14.
Woodford, who was sacked on October 14, was back in Japan to meet shareholders and lawmakers to discuss Japan’s corporate governance, whose image has been hurt by the firm’s admission that it concealed losses for more than a decade.
The Briton had vowed a showdown after quitting Olympus’ board earlier this month.
On Wednesday he appeared to strike a more conciliatory tone toward management, saying he wanted to avoid a so-called proxy war to win shareholder support for sacking its current executives.
“I would have no part, no part in either selling Olympus or breaking up Olympus,” he said at a parliamentary hearing in Tokyo on Wednesday.
“It has to stay a Japanese company on the (stock exchange).
“I want to try to avoid a proxy fight. That would be destructive, that would be unhelpful,” he added.
Woodford, the first ever non-Japanese president and chief executive of Olympus, was stripped of his executive posts after he alleged the firm had overpaid in acquisition deals, including making outsize payments to an unknown adviser based in the Cayman Islands.
Company president Shuichi Takayama pledged last week that the firm’s executives would be replaced “at an appropriate time… after they pave a way forward to rebuild the company”.
His comments came after a committee of outside lawyers and an accountant — all chosen by Olympus — concluded that former president Tsuyoshi Kikukawa and his predecessor Masatoshi Kishimoto approved the cover-up.
The stinging report described top management as “rotten” and “contaminated”, saying they hid at least 134.9 billion yen ($1.73 billion) in losses.
Citing official land registry data, Kyodo News said Wednesday the disgraced Kikukawa, 70, transferred ownership of two condominiums to an “apparent relative” last month, a move that was “probably” aimed at keeping them from being sold to settle any lawsuits against Olympus management.
Olympus earlier Wednesday filed corrected earnings reports for the past five fiscal years, fixing results up until March 2011 to account for over $1.5 billion of investment losses it had been hiding.
For the fiscal year to March 2011 alone, it revised downward its net profit from an original 7.38 billion yen to 3.87 billion yen.
Shares in the company, which is facing several legal and regulatory investigations as well as a class-action lawsuit filed by a US investor, are worth about half their value before Woodford’s ouster.
The volatile stock closed down 4.08 percent at 1,314 yen on Wednesday.