Japan’s embattled Olympus Corp. has proposed a new board of management to replace President Shuichi Takayama and other directors, in a bid to regain public trust following a damaging $1.7 billion accounting scandal.
The Toyko-based camera-maker announced on Monday that Yasuyuki Kimoto, a former executive at Sumitomo Mitsui Bank, Olympus’ main lender, is to become chairman, while Hiroyuki Sasa, head of marketing at the firm’s medical systems unit, will be promoted to president, the Financial Times reported.
Former chairman Tsuyoshi Kikukawa and two other former executives were arrested earlier this month as part of an ongoing probe into the company’s efforts to cover up massive investment losses incurred in the late 1980s bubble economy.
Olympus has admitted to concealing financial losses over two decades. Kikukawa quit as chairman when the scandal broke in October. The company has since sued 19 former and current executives over the issue.
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According to the BBC, shareholders will vote on the nominees at an extraordinary general meeting on April 20. Olympus says the board will have six outside directors, in addition to three current members.
The company’s former chief executive, Michael Woodford, who says he was ousted in October after raising concerns about Olympus’ accounting practices, has criticized the appointments, saying it is not in shareholder interests to have an ex-banker as chairman as he may push to prioritize paying back the firm’s creditors.
Woodford had intended to propose a new slate of candidates and fight for control of the company in a proxy battle, but later dropped these plans, according to Bloomberg.
His criticisms, however, were borne out in a statement on Monday from Josh Shores, senior analyst and principal at Southeastern Asset Management, one of the largest foreign investors in Olympus:
“We are extremely disappointed with the composition of the proposed board,” he said, according to Reuters.
“While suggestions that the board be entirely new individuals, with a split chairman and CEO role, have been taken into account, the clear creditor orientation of the board is unacceptable.”
Olympus slid 3.3 percent on Monday to 1,373 yen, narrowing its gain in 2012 to 36 percent. Its stock has plunged 45 percent since Woodford’s dismissal on October 14.
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