Olympus auditors blamed for financial scandal

An internal investigation at Olympus says five current and former auditors are responsible for a combined 8.38bn yen (€85.7m) in losses linked to the Japanese company's accounting scandal.

But the panel's report released today cleared two accounting firms hired by Olympus as external auditors, KPMG Azsa and Ernst & Young ShinNihon, of any wrongdoing.

The camera and medical equipment maker has admitted a massive cover-up of investment losses dating back to the 1990s and is suing 19 former and current executives for damages.

The scandal first came to light after former chief executive, Briton Michael Woodford, raised questions about questionable transactions, and was promptly sacked last October.

The panel said that auditor Minoru Ohta was aware of the cover-up but had failed to draw attention to it and was responsible for losses totalling 3.73bn yen (€38.15m). Four other auditors also failed to fulfil their duties and were responsible for about 4.66bn yen (€47.65m) in losses, the report said.

Olympus plans to file a lawsuit against the five men with Tokyo District Court, a company official said.

Japanese prosecutors have begun a separate investigation and raided company headquarters and former president Tsuyoshi Kikukawa's home last month.

Olympus barely met its mid-December deadline to avoid being removed from the Tokyo Stock Exchange by filing corrected earnings for the April-September first half and for the past five fiscal years.

Mr Woodford had demanded the resignation of the entire board and mounted a campaign to win back the top job with a new slate of directors. But earlier this month he said he was giving up his fight after failing to win backing from major investors and Japanese megabanks.