Ousted Olympus CEO sees backing for boardroom coup

LONDON Tue Dec 6, 2011 8:14pm IST

Former Olympus Chief Executive Michael Woodford speaks during an interview with Reuters in New York November 30, 2011. REUTERS/Brendan McDermid/Files

Former Olympus Chief Executive Michael Woodford speaks during an interview with Reuters in New York November 30, 2011.

Credit: Reuters/Brendan McDermid/Files

Related Topics

Stocks

   

LONDON (Reuters) - Michael Woodford, the CEO-turned-whistleblower at Japan's Olympus Corp., said he is winning the backing of major institutional investors willing to buy stock and back his campaign to regain control of the disgraced endoscope maker.

Speaking after a company-appointed panel delivered a damning verdict on how top managers bled Olympus of $1.7 billion in one of Japan's worst corporate scandals, Woodford said investors were flocking to meet him.

"Big, big, big names are travelling the world to see me," he told Reuters.

"I met some in New York on Friday and others are coming to London. And I might have to return to Japan in the coming days, it depends."

He declined to identify his contacts, saying only they were "potential shareholders".

Despite his sacking on October 14 for querying a series of odd-looking acquisitions and fees, Woodford remained a company director while launching a one-man campaign to urge prosecutors, regulators and journalists around the globe to investigate.

He finally resigned last week to free himself, he says, of corporate shackles that prevented him from contacting new investors in his quest to oust the current board and lead Olympus back to financial strength.

OPPORTUNIY KNOCKS

The scandal, that could yet spell a delisting if once-venerable Olympus fails to meet a December 14 deadline for reporting results or if the money trail leads prosecutors to Japanese gangsters, has sent the group's stock plunging up to 80 percent.

But investor hopes that Olympus will avoid that step if its boardroom and books are cleansed has sparked a rebound for a company whose robust core diagnostic endoscope business accounts for around 70 percent of the global market.

Woodford said he did not believe new investors such as Wall Street giant Goldman Sachs (GS.N), which snapped up a near 7 percent stake in November, were trying to turn a quick profit on the company's misfortunes.

"I've spoken to people whom Goldman has bought the stock for," he said.

"I don't forsee Olympus being sold or anything like that happening. Those interested in taking a stake see a company that will have a renaissance -- and support a new strong management with me and others."

Market experts say more than 50 percent of Olympus's stock is now likely to be held outside Japan -- although Tokyo-based hedge fund Tower Investment Management has bought a chunky 5.95 percent Olympus stake, according to a regulatory filing.

"I think it's a very dynamic situation," Woodford said. "But I think overwhelmingly those outside Japan support me." He added he would ideally like Japanese institutional support too.

A fresh trip to Tokyo -- which would be his second since he fled the country in October after being warned he might be in danger from organised crime -- would allow face-to-face meetings with Japanese investors.

"It's much easier if they can see me," said Woodford, who cut his teeth at Olympus over 30 years ago.

Rarely for a foreigner, he rose to the ranks of president in April and CEO in October. He says he feels such loyalty to the company he has funded his significant travel and legal bills from his own pocket.

Large western shareholders such as Southeastern Asset Management and Harris Associates of the United States and Scotland's Baillie Gifford, have long called for a shareholder meeting to oust the board and reinstate Woodford.

But an extraordinary shareholder meeting can only be called by the company's board or by investors owning at least three percent of the company in their own name. Big western shareholders have invested largely on behalf of clients.

However, with the independent panel on Tuesday accusing the Olympus board of being riddled with a "tribal culture of the Japanese salaryman" after failing to grill the three executives who have admitted orchestrating the scam, Woodford believes the board can now do little but call for its own demise.

"The company, I think, will call an EGM," he said.

Woodford has spoken in the past of a group of talented Olympus managers he trusts who sit just below the board. Asked whether these, or others, were lined up to take up any empty seats, he said: "In an executive sense, yes. They havent signed on the dotted line, but I'm sure they would be (willing), yes."

(Editing by David Cowell)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Election 2014

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Election 2014

Election 2014

Promises and more promises: India’s parties pitch their visions.  Full Article | Full Coverage 

India Markets

India Markets

Sensex slumps 207 points, at 2-1/2 week closing low.  Full Article 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

New Direction

New Direction

CEO Nadella pushes data culture at Microsoft.  Full Article 

Bitcoin ATM

Bitcoin ATM

China gets first bitcoin ATM, skirting bank crackdown.  Full Article 

Strong Sales Volume

Strong Sales Volume

Small is beautiful for Coca-Cola as volumes soar in China  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage