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Vendor hid losses with spurious acquisition fees

Olympus admits covering up losses

Olympus bosses have admitted that they have been covering up extensive losses by paying inflated fees to ‘advisors’.

The cover-ups first came to light after former CEO Michael Woodford questioned the spurious payments and was fired for the trouble.

Although Woodford alleged shady dealings, Bloomberg reports that the truth has been because the company has been hiding its losses for decades in a process known as ‘Tobashi’. This system, which dates back to the 1980’s, involves attributing payments to paper companies to hide bad investments.

The furore that has surrounded the company since Woodford’s dismissal has seen Olympus’ share price free fall by around 30 per cent, and the Tokyo Stock Exchange is reported to be considering delisting the stricken vendor.

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