Olympus Sued for $241 Million

Olympus Sued by Manulife, 47 Investors for $241 Million

By Kanoko Matsuyama on November 13, 2012




http://www.businessweek.com/news/2012-11-13/olympus-sued-by-manulife-47-investors-for-241-million



Olympus Corp. (7733), the camera and endoscope maker that admitted an accounting fraud, said it was sued by a group of 48 investors for 19.1 billion yen ($240 million) in damages.

The lawsuit by investors including State Street Bank and Trust Co. and Government of Singapore Investment Corporation Pte Ltd. was disclosed after markets in Tokyo closed yesterday. It was filed on June 28 to Tokyo District Court, Olympus spokesman Yasutoshi Fujiwara said.

Olympus shares yesterday rose the most in three months after it raised its earnings forecast. Former chairman Tsuyoshi Kikukawa and two other former executives in September pleaded guilty to covering up losses at the company for 13 years starting in the 1990s.

The lawsuit is in addition to 14 similar cases Olympus has in Japan where investors are suing over the accounting fraud, said another Olympus spokesman, Sam Kobayashi.

The company is studying the content of the notification received and hasn’t decided how it will respond, Kobayashi said. The impact on Olympus’s earnings is unclear, according to its statement.

Other investors include the Japanese unit of Manulife Financial Corp. (MFC), London Life Insurance Co., and the Teachers’ Retirement System of the State of Illinois, according to the statement.

Earnings Forecasts

Terumo Corp. (4543) which bought 6.8 million shares for 15 billion yen in 2009 from Olympus, had also sued Olympus for the accounting fraud, seeking 6.6 billion yen in damages. Olympus admits the accounting fraud claimed by Terumo, though it’s negotiating a lower payment, Kobayashi said.

Olympus surged 5.9 percent to 1,317 yen in Tokyo trading yesterday after revising earnings forecasts.

The company raised its full-year net income forecast 14 percent as it sells assets to boost capital while cutting expected operating earnings amid losses at its camera unit. Investors are more comfortable with the new forecasts, said Tomoki Komiya, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co.

“The revision is reassuring as the previous forecast for its digital camera business had been unrealistic,” Komiya said by phone yesterday. “Olympus showed us its attitude towards its restructure and that’s comforting.”

To contact the reporter on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net