updated 06:20 am EDT, Mon October 24, 2011
FBI said investigating advisor fee scandal
Olympus is reportedly subject to a probe by the Federal Bureau of investigation following its recent advisory fee scandal. Its former British CEO and thirty-year veteran of Olympus Michael Woodford was sensationally sacked on October 14 after an emergency board meeting. This led to Woodford promptly turning whistleblower and revealing a massive $687 million advisory payment made following the $2.2 billion acquisition of Gyrus, a medical equipment manufacturer.
Woodford, 51, has turned over documents pertaining to the transaction he is said to have only recently discovered, which pre-empted his ousting. Olympus has admitted to the oversize payment, which claimed to have been directed to New York-based AXES America LLC and AXAM Investments Ltd based in the Cayman Islands. The fee amounted to 36 percent of the total cost of the acquisition, when typically, such advisory fees are in the order of 1 percent.
Woodford, who has returned to the UK, has handed over files to the British and Japanese authorities. Olympus claims that it dismissed him over leadership and management clashes, however, Woodford claims that his sacking was for calling on senior company executives to resign over the matter.
Olympus, which makes cameras as well as endoscopes, has seen its shares halve in the wake of the scandal.