Olympus Corp Has No Idea Who They Paid $1.6 Billion To
[New CEO of Olympus Michael] Woodford in his time in Tokyo had been digging into four separate acquisitions Olympus had made from 2006 to 2009. Three of the four had already had their assets written down to just a fraction of the nearly $1 billion Olympus paid to buy them. Each of the firms involved in those three cases — a recycling company, a company that makes anti-aging cosmetics, and a company that makes microwave oven-safe food containers — were registered in the Cayman Islands, a famous tax haven in the Caribbean. And all three were dissolved shortly after the deals were done. Extraordinarily, at a press conference on Oct. 27, Olympus executive vice president Hisashi Mori said that the only information his company has about the shareholders of the three are the names of the entities in the Caymans that the payments went to — for example, one called Neo Strategic Venture LP — and bank account numbers. Said Mori: “We know nothing about who they are.”
It is still far from clear whether Woodford’s suspicions that “sinister” elements were involved at Olympus will be borne out. But it’s also a fact that for decades there have been links between organized crime groups — the Yakuza — and Japan Inc. Companies have long used members of organized crime groups to ensure that annual meetings are peaceful — that pesky shareholders don’t get too out of line with annoying questions of management. In 1999, the chairman of what was then Japan’s largest bank, Dai Ichi Kangyo, was convicted of paying off these so-called sokaiya — corporate shake down artists — and given a nine-month sentence. Three years ago, in response to reports that organized crime had gone upscale and was investing large sums in publicly held companies, Japan’s Securities and Exchange Surveillance Commission compiled an index of more than 50 listed firms with alleged ties to organized crime.