Olympus hit by payments report, shares decline 24%

Shares in Olympus Corp plunged by a quarter on Monday after media reports quoted its ousted chief executive as accusing the board of firing him for probing allegations of improper payments related to acquisitions.

Michael Woodford was sacked just two weeks after the company had promoted the Briton from president, with glowing reports on his performance.

Combined with Friday's 18 per cent fall, the plunge has wiped out $3.2 billion in market value from the Japanese precision instrument and camera maker. “It's natural for a company's shares to drop like this after such shocking news, and with management direction so unclear,” said Fujio Ando, senior managing director at Chibagin Asset Management, which does not hold Olympus shares.

In an interview with the Wall Street Journal, 30-year Olympus veteran, Woodford, said he had asked the chairman, Tsuyoshi Kikukawa, to resign over serious governance concerns.Olympus denied any wrongdoing, but the sacking triggered a slew of downgrades from brokerages worried about Olympus stepping back from a commitment to cut costs.

“All merger and acquisition deals were conducted using appropriate accounting, following appropriate processes,” an Olympus spokesman told Reuters.

Japanese boards rarely dismiss top executives, so the announcement took financial markets by surprise.

Olympus ended 24 per cent lower at 1,555 yen, the lowest in two and a half years in a market up 1.5 per cent. More than 54 million shares were traded versus average full-day volume of three million shares traded over the past 30 days.