The former Olympus CEO, Tsuyoshi Kikukawa, is facing five years in jail for being the mastermind of a $1.7 billion fraud, which has been exposed in late 2011.
A team of prosecutors have asked a Japanese court to put Tsuyoshi Kikukawa in jail for the next five years, for his contribution to a $1.7 billion loss cover-up.
Kikukawa and his accomplices are facing jail time sentences
The pursuers are also seeking a fine of one billion yen (about $10.6 million) against Olympus, as the company’s executives have hidden huge losses over the course of many years.
A couple of years ago, it has been uncovered that Olympus concealed $1.7 billion losses in the period between 2007 and 2011. The financial losses have been masked by the company’s CEO at the time, Tsuyoshi Kikukawa, and his second in command, vice president Hisashi Mori.
Another person involved in one of Japan’s biggest corporate scandal is auditor Hideo Yamada. Both he and the former vice president are facing jail time, but for a shorter period.
The prosecutors have told the Tokyo District Court’s Judge that the three men have damaged Japan’s reputation and the confidence of both domestic and intentional consumers with their wrongdoings.
The defendants have already pleaded guilty, but they are scheduled to speak in the same court in April.
Olympus may have to pay a $10.6 million fine
Olympus may also be forced to pay the $10.6 million fine due to the bad investments it has been making since the 1990s.
All of this would not have surfaced if it had not been for Michael Woodford, who worked for the company for 30 years. In September 2011, he has been appointed as CEO of Olympus.
After just a few days of being in charge, Woodford decided to look into the company’s financial reports. He discovered that the former leaders made some questionable money transfers to companies in the Cayman Islands, even though they were not related to the Japanese corporation.
Following his investigation, he has been fired. Soon after that, he fled to England and started to cooperate with Japanese investigators.
Eventually, Olympus’ executives came clean and they paid Woodford a substantial amount of $15 million for terminating his contract. Additionally, the company paid a fine of $2.4 million for the $1.7 billion fraud.
The final sentence will be heard sometime in the following months. It remains to be see whether or not Tokyo District Court’s Judge will send Kikukawa to jail for five years.