Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Olympus sues current board members and current president

with one comment

Yesterday I mentioned that Olympus was going after its former chairman and two others.

Today we found out who was sued.

A WSJ report indicates Olympus has sued 19 executives, including the current president and four current directors who are also senior executives over the fiasco of hiding a $1.7M loss. 

I can’t find the article from this morning’s WSJ paper, Olympus sues Board Members, at the on-line site. The on-line update is at Olympus to Retain Top Executives (behind paywall). (Update: just did another search on the ol’ net – found the WSJ article, which Google says was posted 7 minutes ago:  Olympus sues Board Members. Also noticed there are 473 articles related to the first-listed NYT’s report.)

The five current officers named in the suit will remain employed, according to the article, which says:

The company also said the directors who are being sued, including five incumbent executives, will stay in their posts until the next shareholders’ meeting in March or April, to “avoid harming the company’s operations.”

My reaction, which was to wonder why the five individuals were not escorted from the building under armed guard, is matched by this much more restrained, understated public comment:

Mr. Hatta said Olympus’s decision to retain its current executives—even as it sues them—is the latest sign that the company doesn’t understand the urgent need to shake up its corporate culture.

Mr. Hatta is identified as

a professor of accounting and corporate governance at Tokyo’s Aoyama Gakuin University

I agree with Mr. Hatta.  I think the senior leadership did not catch the point of the recommendations from the previous panel’s report, discussed here.

I do not understand how a company with this much of a fiasco on their hands could sue 5 senior managers and let them stay on the job.  

How does one ethically supervise the legal staff handling a lawsuit against oneself?

The WSJ article refers to a 200 page report from an independent panel of attorneys who were looking at who did what and who knew what.  I did a quick search on the ‘net.  Found lots of articles describing the suit, but no references to the report. I’ll keep my eyes open for it.

Written by Jim Ulvog

January 10, 2012, 12:52 pm at 12:52 pm

Posted in Accounting, Fraud

Tagged with , ,

One Response

Subscribe to comments with RSS.

  1. […] Olympus has sued the five internal auditors for the costs to investigate the cover up, according to all of the articles I’ve mentioned above.  This is in addition to the 19 executives sued last week. […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: