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September 4, 2013

SFO to prosecute Olympus over accounting fraud

Two years after the Olympus $1.7bn accounting fraud was exposed, the UK Serious Fraud Office (SFO) said it will prosecute Olympus and its British subsidiary Gyrus over the falsified accounts.

Olympus said in a statement that the SFO alleges the global camera maker and its UK subsidiary broke section 501 of the UK Companies Act 2006, which sets out the liability of those who convey information required by auditors.

The SFO believes that certain people within Gyrus gave misleading and deceptive explanations to the auditors in connection to the company’s accounts for the fiscal year 2009 and 2010.

In July a court in Tokyo gave chairman Tsuyoshi Kikukawa a three-year suspended sentence. Former executives Hideo Yamada and Hisashi Mori were given two-and-a-half-year suspended sentences, while Olympus was fined with $7m.

The Olympus fraud was first exposed by former chief executive Michael Woodford, who raised alarm bells in global media after the Olympus board dismissed his concerns over accounting fraud.

So far all investigations related to the scandal found no great fault with the company’s auditors, EY ShinNihon and KPMG Asza, and blamed the executive team for the extent of the fraud.

Olympus shares dropped almost 7% after the SFO announcement to prosecute and the company might be facing a significant fine.

Related articlesOlympus former chairman sentencedAuditors are part of the problem: Woodford

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