(Image source: The Telegraph)

BY ANLI XIAO

Who’s responsible for Olympus’s cover-up of $1.7 billion in investment loss? A third-party panel released a report Tuesday. The New York Times says it called the camera and medical equipment company’s management, quote, “rotten to the core.”

“The panel’s findings appeared to vindicate … the company’s ousted president, Michael C. Woodford … The report also highlights the role played by three former Nomura bankers in arranging the cover-up, as well as alleged failings of Olympus’s auditors … in exposing fraud at the company.”

The scandal broke in October when Woodford, who had been fired, went public with allegations that the management team had covered up hundreds of millions in losses.

The now-vindicated Woodford spoke to Bloomberg about the report, saying the entire Olympus board’s gotta go.

WOODFORD: “The report is much more explicit than its language, and much more direct than I anticipated, and I found a very important improvement...”
ANDREA CATHERWOOD: “So what do you think should happen the next? Should the whole board go?”
WOODFORD: “Yes, they have to go... ”

But getting rid of the corruption may be easier said than done. According to Reuters the cover-up might go as far back as 10 years. And The Telegraph says three banks, SocGen, Commerzbank and LGT, may be to blame for helping Olympus with the cover-up -- though the banks are staying quiet.

“SocGen declined to comment. Commerzbank said it was in ‘full compliance with all relevant laws’. LGT said it did not comment on client relationships.”

Sky News has Olympus’ response to the report -- but notes that the third party panel was appointed by the company.

“...it will set up a special committee to ‘begin pursuing the responsibility of those involved’ although it should be noted that the current investigating panel was chosen by its board as well.”

Olympus lost half of its value as a result of the scandal. Woodford said he will be returning to Japan to meet with shareholders and potential new investors in an effort to save the company.