Olympus’s former president tells court he covered up huge losses

The scandal emerged last year when Michael Woodford, the British chief executive who turned whistleblower, raised questions about payments for financial advice and dubious acquisitions. Mr Woodford was then sacked. Tokyo prosecutors have charged the company, Kikukawa and other officials, arrested in February with breaking laws regulating securities exchanges by falsifying company financial statements.

If found guilty, individuals face up to 10 years in prison, a £79,000 fine, or both. The company can be penalised with a fine of up to £5.5m.

Olympus has said it hid £925m in investment losses going back to the 1990s.

“There is no mistake. The entire responsibility lies with me,” Kikukawa told the Tokyo court.

Three other Olympus executives also pleaded guilty and the company also entered a guilty plea.

Kikukawa read from a piece of paper and apologised for “all the troubles caused to investors, customers, employees and the general public”.

Prosecutors outlined in detail the elaborate schemes concocted over the years, using overseas bank accounts, paper companies and transactions it controlled behind the scenes, all to keep massive losses off the company books for years.

Kikukawa, who also served as chairman at Olympus, wore a dark suit and kept his head down as the charges were read to the court, which was packed with reporters and members of the public who had drawn lots to listen in. He said he had often pondered coming forward with the wrongdoing but could not do it.

The Olympus scandal has tarnished the reputation not only of a once prized manufacturer but also of Japan as the nation struggles to improve in corporate governance.

Mr Woodford, one of a handful of foreigners to lead a major Japanese company, has emerged as a hero in Japan, where outspoken people are rare and whistleblowers are routinely treated as outcasts.

He has consistently defended Olympus products and the honesty of the rank-and-file workforce, while slamming Kikukawa and others at the top.

Mr Woodford initially tried to make a comeback at the company, but had to give it up when 
he learned that through a system 
of cross-shareholdings, management had a lock over appointments.

But he sued in a British court, accusing Olympus of unlawful firing and discrimination, and won a £10m settlement from the company in June.