This report in the NY Times of their British executive being forced out because he was questioning 3 very dubious financial decisions made by the Olympus chairman, Tsuyoshi Kikukawa without board approval, including:

• $687m paid to two financial advisers over the acquisition of a British medical technology company Gyrus in 2008 which represents over a third of the sale price – one of the advisers, AXAM Investments in the Cayman Islands, was removed from the Cayman local business registry last year for nonpayment of license fees
• the acquisition of three companies — including a maker of facial creams and Tupperware-like plastic cases for use in microwave ovens — in 2008 for $773 million. Later that fiscal year $586 million of their value was written off!

These do seem very strange and it is suggested that they represent a loss of $1.3b in shareholder value as a result of these alleged improper transactions.

The stockmarket has reacted savagely, with the Olympus market capitalisation falling $3b in just two sessions, dropping 18% on Friday then 22% yesterday.

Whatever is going on does not look good and perhaps paves the way for Panasonic to buy out the imaging division and leave Olympus with its medical division as has been rumoured some months ago.

Olympus needs to address this quickly and restore faith in the company.