Steve Chiotakis: Japanese camera maker Olympus is reeling now, with stocks going for pennies of what they were just a few days ago. The company admitted this week to covering up huge losses dating
back to the 1980s.
The former President and CEO Michael Woodford —
who was just fired last month — is with us now to talk about a cover-up he says he knew nothing about. Good morning, sir.
Michael Woodford: Good morning.
Chiotakis: You worked for this company for many years — why just now raise these questions?
Woodford: I worked for the company for just over 30 years and was running the European operations of Olympus until April 1st when I was made the president.
I knew nothing about any of these issues until an obscure financial journal published an article at the end of July in Japanese and I started to have friends and colleagues email me saying: hey, look at this, this sounds serious, these very strange allegations against the company’s M&A activities of recent years.
Chiotakis: Some shareholders are calling for you to come back to the company. Is that a possibility?
Woodford: It is. I feel an obligation to the 40,000 people who work at this company. After 30 years, you bond with many people and I don’t want to just leave them with the company in this state.
Chiotakis: What would you do if you went back to the company?
Woodford: I mean the first thing is that you cleanse it. Olympus is a great company but its problem is a sickness at the top, it’s a cancer at the top, and all fourteen directors have to go, you need new management, then you need forensic accounts in to establish the integrity of the accounts.
Once you do that, you can start rebuilding the corporation, but in a cleansed form, becoming an example of what corporate governance should be in Japan.
Chiotakis: About that corporate governance in Japan, is this story more than just about Olympus? Is it perhaps a bigger story than that?
Woodford: It is. There’s also questions in relation to the auditing firms — both KPMG and Ernst & Young signed the accounts of Olympus off.
Now we know these dirty secrets have been hidden. So, a lot of people have a lot of questions to answer and the story, I’ve got no doubt, is going to have many tentacles which will touch on all sorts of issues in corporate Japan.
Chiotakis: I know the stock value has dropped — has plummeted, actually — by what, 80 percent? And Olympus’s reputation has taken really a big hit. What happens next at the company?
Woodford: We make products people want to buy. Particularly in the health care and microscope sect6ores and industrial sectors, we are leaders. The company has a good base, it’s a real business, we just need to bring confidence and the way you achieve that is transparency and knowing that the people who running the company have integrity and honesty — very basic and simple things. Then you can have confidence and go forward.
Chiotakis: Michael Woodford, president and CEO of Olympus, thank you for joining us today.
Woodford: My pleasure.