8 Nov 2011

Camera maker Olympus admits cover-up of investment losses

7:33 pm on 8 November 2011

Japanese camera maker Olympus has admitted covering up huge investment losses for decades.

In response, the company's share plunged 29% before hitting daily price fall limits on the Tokyo sharemarket.

The company admitted it had used funds related to past acquisitions to cover the losses.

The BBC reports the first hint that there were serious issues came when the company's British president, Michael Woodford, was ousted abruptly six months into the job.

He said he had been dismissed for raising questions about payments to two firms, one of them in the Cayman Islands, of US$687 million for advice about a US$1.9 billion take-over in 2008.

Olympus had also bought three small Japanese firms for nearly US$1 billion and then writing down most of their value.

It has now admitted the funds were used to cancel out the earlier losses on securities investments.