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Japanese Prosecutors Charge Olympus, Former Executives

Prosecutors indicted Japanese endoscope and camera maker Olympus and six persons on charges of falsifying securities reports.

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According to a fax from the Tokyo District Public Prosecutor’s office today, former chairman Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and ex-auditing officer Hideo Yamada, were charged in the scandal that has decimated Olympus’s stock by 48 percent since October. Akio Nakagawa, Nobumasa and Taku Hada were also indicted.

The scandal broke when Olympus sacked former CEO Michael Woodford for questioning its board, including Kikukawa, about inflated payments made for takeovers.

“The company’s indictment could lead to more concerns that the fraud was organizational,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “Investors won’t be wanting to buy a stock like this.”

Olympus said in a statement today: “We take the indictment seriously and will try to strengthen our corporate governance.” The management of the company will likely be replaced by the shareholders at a meeting next month.

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To contact the reporter on this story: Alex Capel at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com