Six banks goes after Olympus over long-term accounting fraud

The camera and endoscope maker Olympus Corp has been slapped with a lawsuit by six banks over alleged accounting fraud. The banks are reportedly seeking 27.9 billion yen or $273 million in damages, of which Bloomberg deemed as the largest amount among civil lawsuits filed against the company.

According to a statement released today by Olympus, the complainants claimed that the Tokyo-based company has submitted false financial statements between fiscal years 2000 to the first quarter of fiscal year 2011. Olympus stated that it has already received a notice from the attorneys of the plaintiffs and has yet to be served with the lawsuit. The banks who are seeking damages against Olympus are Mitsubishi UFJ Trust & Banking Corp, Master Trust Bank of Japan Ltd, Japan Trustee Services Bank Ltd, Trust & Custody Services Bank Ltd, Nomura Trust & Banking Co, and State Street Trust & Banking Co.

Bloomberg said indication that the company had resorted to accounting fraud was when Olympus admitted to concealing losses incurred in the past by inflating the amount of fees to advisers and overpaying for takeovers. The admission occurred following the reduction of its net assets by $1.3 billion in 2011. The following year in November, Olympus had to increase its cash allocation for lawsuits, lowering its profit forecast for the fiscal year ending March.

Tokyo-based analyst Claudio Aritomi at Macquarie Group Ltd told Bloomberg, "This is just a reminder to the market of the contingent risk associated with the past of Olympus. There was always the risk there could be more coming."

Spokesman Takeshi Yuki for Mitsubishi UFJ Trust, which is one among the plaintiffs, are seeking a combined amount of 12.4 billion yen in compensation along with Master Trust Bank of Japan for losses incurred when they sold Olympus shares. The shares took a significant dive when reports about the the camera maker's financial reports said that they were misstated.

Tags

Olympus Corp, Mitsubishi UFJ Trust, Master Trust Bank of Japan

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