The former chief executive of disgraced Olympus Corp, Michael Woodford, launched a campaign on Thursday to oust the board of directors, reclaim his old job and bring in his own team to save the Japanese firm from a big accounting scandal.
Woodford, who blew the whistle on accounting tricks at Olympus after he was sacked in October, said he was putting together a team of candidates for a new board and talking to shareholders about replacing the current leadership, hopefully by February.
But the Englishman, who was a rare foreign CEO in Japan, denied he was considering an option to lead an overseas buyout of the 92-year-old maker of cameras and medical equipment.
Woodford, speaking in New York where this week he met Federal Bureau of Investigations officials probing the Olympus scandal, said he had finally resigned from the Olympus board on Thursday in order to openly campaign for its removal.
He said he had spoken to some shareholders about options for a reconstituted board, and hoped Olympus would call a shareholders meeting to elect new directors by February, though he had yet to draw up his own team of directors.
"This won't be aggressive or hostile in any way," he said.
Woodford and the board, led by Olympus President Shuichi Takayama, face a battle to see who has more shareholder support, but the Englishman may face resistance from Japanese investors making up the bulk of the company's share register.
Some domestic shareholders believe he could have handled the affair less openly and aggressively.
PRIVATE EQUITY INTEREST
Olympus has lost more than half its market value since firing Woodford on Oct. 14, an event that prompted him to go public with concerns he said he had been raising internally over a string of dubious acquisition payments dating back five years.
Woodford had remained a board director, however.
Olympus admitted last month to hiding investment losses from its investors for two decades and using some of $1.3 bln spent on questionable deals to aid in the cover-up.
The stock rose 5% on Thursday after Woodford's comments, though the company still faces heavy writedowns and possible delisting from the Tokyo stock market, a humiliation that could put it under pressure to sell core assets.
Private equity funds see Olympus as a good potential opportunity for new investment in Japan and would be interested in either buying Olympus whole or its non-medical businesses, say sources in the private equity industry.
Olympus's main business is diagnostic endoscopes, which are used to peer inside patients and detect cancer and other diseases. It enjoys a near-monopoly worldwide and is worth $2.6 bln in annual revenue.
ON A MISSION
Some of Olympus's main shareholders have cut their stakes, joining an initial rush of selling that left Wall Street bank, Goldman Sachs, a market-maker in the stock, with a near-7% holding currently worth more than $200 million.
Goldman has said the holding is not strategic — which could further erode shareholder support for the existing Olympus board, which wants to preside over the initial clean-up.
Nippon Life Insurance Co, previously Olympus's biggest shareholder, has said it would continue to support Olympus, though it has cut its holding to 5.11%.
Big foreign investors want the board to leave, and Woodford to return and lead a clean-up of the company, but they have not been able to convene an urgent shareholder meeting.
The biggest foreign shareholder, Southeastern Asset Management, with about 5%, has backed Woodford's call for a board overhaul. UK fund manager Baillie Gifford & Co, with about 4%, wants him reinstated as CEO.
