Three former executives of disgraced medical equipment and camera maker Olympus Corp were arrested on Thursday over their role in a $1.7 billion accounting fraud, one of Japan’s biggest corporate scandals.
The three had been identified by an investigative panel, commissioned by the company, as the main culprits in the fraud, seeking to delay the reckoning from risky investments that Olympus, like many Japanese companies, made in the late-1980’s bubble economy.
Tokyo prosecutors arrested ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said in a statement.
Also arrested were four others, including former bankers Akio Nakagawa and Nobumasa Yokoo, suspected of helping the executives hide huge investment losses through complex M&A deals.
The arrests come as investors focus on who will run the once-proud company when its management steps down at an April 20 shareholders meeting, and whether Olympus will seek a capital tie-up to fix its balance sheet.
Olympus is banking on that April meeting marking a turning point in the scandal, with at least six of its 11-member board, including President Shuichi Takayama, set to resign.
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