Shares tumble as FBI probes Olympus scandal

| 25/10/2011

(Reuters): The FBI is investigating the massive advisory fee involved in Olympus Corp's takeover of a British company, a person familiar with the probe said, in a deepening scandal that has wiped out more than half the company's value. The British CEO who says he was fired for questioning the $687million payment to advisers in the $2.2billion takeover of medical equipment maker Gyrus has called on authorities in both Britain and Japan to also investigate the payments. The endoscope and camera maker said last week it would commission its own independent review of past acquisitions, although the ousted CEO, Michael Woodford, said the company was playing for time.

It carried out a review in 2009 that concluded no management wrongdoing, documents he provided show.

The 92-year-old company is struggling to contain the crisis following Woodford's revelations. Olympus acknowledges it made the advisory fee payment and denies any wrongdoing. But it has not explained why it agreed to a fee that amounted to about a third of the value of the takeover when such fees normally come to about 1 percent. At $687 million, the fee is the largest on record.

Woodford, 51, who spent three decades at Olympus, has identified the advisory firms involved in the takeover as New York-based AXES America LLC and AXAM Investments Ltd in the Cayman Islands.

The Federal Bureau of Investigation in New York is currently investigating the payment, according to the person familiar with the investigation. This person was not authorized to speak publicly as the investigation is ongoing.

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Category: Finance

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