A row at Olympus, the Japanese camera and endoscope maker, has wiped over 40% off the share price. The British former CEO Michael Woodford, fired last week after just a fortnight on the job, says he was ousted for trying to find out why Olympus had hugely overpaid for some acquisitions a few years ago. One issue he has raised is why Olympus paid an adviser a third of the purchase price when it bought Britain’s Gyrus in 2008. Fees of 1%-2% are typical. Woodford, who has taken his case to the Serious Fraud Office in Britain, has called on shareholders to oust the board. Olympus says that Woodford, who has been at the firm for 30 years, was fired because of “differences in management direction and methods”.
What the commentators said
The firm’s insistence that Woodford was fired because of a culture clash won’t wash, said Leo Lewis in The Times. It makes no sense that Woodford, having “navigated the intricacies of Japanese corporate culture for 30 years, should suddenly be incompatible with them” once he reached the top. He appears to have fallen victim to “secretive, sclerotic corporate Japan”. The firm has certainly made little effort to shed light on the matter, said WSJ.com. After the group’s chairman insisted the advisory fee in the Gyrus deal was half the total claimed by Woodford, the firm admitted his figure was right.
“Woodford clearly rubbed someone up the wrong way,” said Wayne Arnold on Breakingviews. But the bigger picture is that corporate governance reform is making gradual progress in Japan. Foreigners hold a fifth of listed firms, and pension funds “are starting to reject low dividend proposals and poorly performing directors”. It’s too late now for “Japan Inc to curtail the reformist experiment”.