(Image Source: Asahi)

BY YUTAKA HAYASHI

Optics manufacturer Olympus can’t hide any more. After denying wrongdoing since the magazine FACTA first caught wind of the story in August...

Olympus finally admits to partaking in what some in the media call a “hot potato scheme” -- in a nut shell -- using mergers and acquisitions to cover up company losses.

"It seems this goes back years and years. They had investments that were not working out and one of the things that they seem to have decided to do was to make a bunch of acquisitions that make no sense to anybody. This would kind of move the attention over here, and people were saying 'what exactly were these guys doing?' and that prevented... inexplicably, yeah, I know, it's a very curious situation over there.” (The Wall Street Journal)

The newly appointed Olympus president claims ignorance. Here’s CNN.

“The new Olympus president Shuichi Takayama blamed the misleading financial statements on three company executives including the former chairman Tsuyoshi Kikukawa. But Takeyama stopped short of saying he’d reinstate Michael Woodford, in fact he said we are quite the opposite. Woodford, of course was fired after questioning the suspicious payments.”

Mr. Woodford -- the whistleblower -- however, believes president Takayama was fully aware of Olympus’ scheme. He spoke with Tokyo-based TBS.

"What were these original losses in the 1990s? Then we paid over 1.5 billion dollars to cover these losses. Who received that money? Who took fees from that? Who advised us? They are very important questions, which are unanswered.”

Mr. Woodford also recalls the exchange he had with ex-V.P. Hisashi Mori when he asked him about the issue.

“...I said: 'Mr. Mori, who do you work for?' And his answer, I will never forget. He said, 'I work for [Chairman] Kikukawa, I'm loyal to Mr. Kikukawa.”

So, could this be another Enron? According to Bloomberg, some big shareholders are optimistic about Olympus, but they want Mr. Woodford back to solve the problems.

“There is a real business -- it is the world's leading endoscope company, they have some very unique technologies, they have hard-working employees, they have good customers -- all we have to do is clean up the mess. And, I think the best thing at this stage to do is to bring back Mr. Woodford, to kind of lead the housecleaning."

The New York Times reports -- Olympus could be delisted from the Tokyo Stock Exchange following the incident.