Olympus Corp., the Japanese optics manufacturer now embroiled in a massive accounting scandal, is suing several executives, seeking millions of dollars in damages.
The targeted officials are current Olympus President Shuichi Takayama and three ex-directors who were identified by investigators as having been involved in a $1.7 billion fraud. Over a period of more than a decade, former Chairman Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada were key figures in a scheme to hide securities losses from Olympus investors by overpaying for small, obscure companies, an outside panel recently reported.
The scandal, which has wiped out almost 60% of Olympus's market value, came to light in October, after newly-appointed CEO Michael Woodford began asking questions about suspicious mergers and acquisitions transactions, as well as payments to entities based in places like the Cayman Islands. Woodford ordered an investigation by PricewaterhouseCoopers, which found grave problems with the company's internal controls. When he presented this report to the board of directors, Woodford was fired. That same evening, he flew to London and requested an investigation by the British Serious Fraud Office.
Woodford, who has said he will sue Olympus for unfair termination, recently gave up on a fruitless three-month campaign to convince shareholders to return him to the top spot at the firm, and to dump its board.
"The board has to go," Woodford told Bloomberg Television in October, "they're all toxic, they are all contaminated." The current directors have said they will resign and hold an extraordinary shareholders meeting to choose their successors in March or April.
No Clear Links Found to Organized Crime ... Yet
The investigation into Olympus is ongoing, and could lead to criminal charges. There have even been rumors, reported in the Japanese press, of a connection to the yakuza, Japan's organized crime syndicates. Brokers who were involved in the fraudulent acquisitions might have had ties to organized crime, meaning that payments from Olympus could have wound up in the pockets of "antisocial forces" (as Japanese media outlets call the yakuza).
According to The Economist, "The Tokyo stock exchange delists a firm if it sees ties to the yakuza," but no evidence of this has yet emerged in the case of Olympus, which is fortunate for investors: As Reuters explains, "Delisting would cut the firm off from equity markets and jeopardize its funding at a time when fresh capital is needed to repair its balance sheet."
The stock exchange is also supposed to delist a company if wrongful financial reporting has a "material impact," which certainly seems to be the case with Olympus' enormous fraud. But, as The Economist notes, "Japanese regulators sometimes interpret such rules in creative ways." Currently, the Nikkei is finalizing plans to keep Olympus listed, although designated as a "security on alert" -- essentially, a form of probation requiring the company to demonstrate improvement in corporate governance. The exchange will also fine Olympus 10 million yen -- about $129,700.
Skeletons in the Corporate Closet
Olympus Sues Ex-Execs; Did Yakuza Have a Hand in Billion-Dollar Fraud?
These days, it seems almost impossible for a major corporation to get away with a scandal without an onslaught of media coverage. But dig deep enough, and you'll find carefully buried skeletons in just about every corner office closet.
Minyanville dug deep into the sordid pasts of some of the best known names in global capitalism and the skeletons just flew out.
From McDonald's to Volkswagen, click through our gallery to find out what you didn't know about the companies you thought you knew so well.
When Ray Kroc, founder of McDonald's, finally submitted to hiring females in his restaurants nearly 15 years after the founded the chain, he reportedly insisted they be "flat-chested and unattractive women."
A spokeswoman from McDonald's couldn't verify the precise quote, but she did confirm the essence of it. "He wanted to hire flatter-chested women who would be less attractive to men," she said.
Years before we'd come to associate our beloved Bug with the emblem of the peace sign, Volkswagen's long strange trip began with a swastika. The iconic, quirky little car often dubbed the "hippie-mobile" was originally, quite literally, the Hitler-mobile.
The brainchild of the Führer himself, the car was masterminded as a gift to the German common man. Translated as the "people's car," Volkswagen would provide a cheap, fast, and fuel-efficient means of travel to a country where only a wealthy few owned cars. Hitler, however, never lived to see his pet project come to fruition since the Beetle wouldn't be mass produced until after the Nazi surrender.
For the nearly two decades since entering the US market, Red Bull has been running from controversy like a bovine through a Pamplona street. The energy drink has been implicated in a number of serious, even fatal, swigging and swooning incidents all across the globe.
A 2008 Australian study found that Red Bull can increase your risk of heart attack or stroke. Just one can of sugar-free Red Bull caused the blood of healthy subjects to become sticky and temporarily raised their cardiovascular risk to levels seen in individuals with cardiovascular disease. But Red Bull disagrees with such assertions.
There is a dark truth about the multi-billion dollar chocolate industry: It has yet to eliminate the child and slave-like labor used to harvest cocoa in the nations where most of the world's supply is grown. According to some human rights activists, "Big Chocolate" hasn't even made a noticeable dent in the problem.
The issue is not a new one. For more than a decade, international labor groups, along with journalists from the New York Times, the BBC, and other major agencies, have been reporting on the West African practice of using young kids, many under age 10, to harvest the cocoa that -- after passing through the hands of farming co-ops, exporters, and food conglomerates -- becomes the chocolate used to make the candy in your local deli or office vending machine.
Chiquita & Dole, two top banana companies, stand accused of hiring murderous terrorist groups.
In his ruling to allow a Chiquita suit to proceed through the judicial system, U.S. District Judge Kenneth A. Marra wrote that the families of the victims "allege that Chiquita, knowing that FARC was a terrorist organization, intentionally agreed to provide money, weapons and services to it as part of a common scheme to subvert local trade unions, protect Chiquita's farms and shipments, harm Chiquita's competitors, [and] strengthen FARC's military capabilities, and that [the families] were injured by overt acts done in furtherance of the common scheme.
Dole faces a similar suit. Almost a year ago, 73 heirs of individuals who were murdered by the AUC (another terrorist group) filed a legal complaint against the company.
As Looney Tunes and Merrie Melodies shorts often reflected the era at the time of it being inked, they sometimes touched upon sensitive issues with an arguably insensitive approach. Although a sparked stick of dynamite and a giant mallet over the head could easily be laughed off by most, shorts centered around harsh African American stereotypes will do more than just raise an eyebrow.
In 1968, United Artists selected 11 Warner Bros. cartoons that the studio determined to be overtly insensitive to African Americans. As owners to Associated Artists Productions and the cartoon library therein, United Artists pulled the cartoons -- dubbed the "Censored 11" -- from distribution and withheld them from being officially aired on television or released on video
For many years, GE had done business in post-revolution Iran through foreign subsidiaries, selling energy-related products and health-care equipment. GE spokesman Gary Sheffer emphasizes that the business was always a very tiny one for the multinational powerhouse: It amounted to less than 1% of the company's revenue, he says.
Still, regardless of how small this bump proved to the company's bottom line, criticism of GE's involvement in the country ratcheted up in the middle of the last decade.
Policymakers and shareholders, upset with the company's involvement in a country branded by the US government as a state sponsor of terrorism, demanded change from GE's front offices.
But, initially, despite public rebukes, GE fought to maintain a footprint in Tehran.
Although we acknowledge that slavery is part of our country's past, few realize how closely it's tied to some of the most prominent companies in our present, like JPMorgan Chase.
The multinational bank admitted in January 2005 that it had discovered ties to slavery through two of its predecessor banks -- Citizens Bank and Canal Bank in Louisiana. Between the years of 1831 and 1865, the banks accepted approximately 13,000 slaves as collateral on loans and took ownership of 1,250 people when plantation owners defaulted on those loans.
In June of 2009, Royal Dutch Shell, one of the world's largest oil conglomerates, decided to pay $15.5 million dollars to settle a lawsuit accusing it of human rights abuses in the Niger Delta area of Nigeria, rather than go to court.
The suit asserted that in the early '90's, Shell became concerned about author and activist Ken Saro-Wiwa's high-profile campaign to protest the impact of oil production throughout the Niger Delta's region and sought to eliminate that threat through a systematic campaign of human rights violations.
While Coke represents a wholesome, all-American image to consumers, there are markets necessary to its long-term financial health that don't adhere to wholesome, all-American ideals.
Take Colombia, where a decades-long civil war has resulted in thousands of assassinations, kidnappings, and cases of torture at the hands of right-wing paramilitary groups -- including the killings of eight people who worked for Coca-Cola bottlers.
According to a lawsuit filed in Miami in 2001, after the union (at a Colombian bottling plant) elected a new board, the general manager brought in paramilitary members to destroy the union. On the morning of December 5, 1996, a union negotiator who manned the plant's front gate was shot and killed by paramilitary members on motorcycles.
Chances are, you never saw The Conqueror. RKO Pictures' sprawling epic of a film, The Conqueror won't be found in many classic collections, nor is it considered vastly underrated by critics or cinephiles. No, by almost every account, it was an unmitigated disaster.
To make matters much worse, the film was shot along the red bluffs and scrubby flatlands of St. George, Utah. Unfortunately, production commenced 137 miles downwind from an atomic testing range in Nevada's Yucca Flats. No less than 11 atomic explosions occurred there the year before, two of which scattered ample amounts of radioactive material throughout the area. The nukes, nicknamed Simon and Harry, were several times larger than the 13 kiloton bomb dropped on Hiroshima.
91 members of the cast and crew -- including leads John Wayne, Susan Hayward, and Agnes Moorehead, stuntmen Chuck Roberson and Bernie Gozier, and director Powell -- each contracted various forms of cancer in the years following production.