FBI questions former Olympus CEO in fee scandal probe

MassDevice has further news on the unfolding Olympus/Gyrus acquisition story:

The FBI is investigating the $687 million payment to an acquisitions advisor by Olympus Corp. connected with the $2.2 billion buyout of Gyrus and has interviewed former CEO Michael Woodford, an Olympus lifer who was fired weeks after taking the top job.

The FBI is probing the $687 million fee Olumpus Corp. (TYO:7733) paid an acquisitions advisor for its $2.2 billion buyout of Gyrus Group in 2008 and has interviewed former CEO Michael Woodford, a 30-year Olympus veteran who was sacked weeks after taking the top spot.

Woodford, who commissioned an external investigation of the record-breaking payment, told Reuters today that he’s spoken with FBI agents.

“I’m in contact with the FBI, but I’m not prepared to elaborate further than that,” Woodford said. He’s also contacted British and Japanese investigators about the fee scandal, which has seen its stock price cut nearly in half since the story broke Oct. 14.

Olympus shares regained some of that today in Tokyo, rising 8.2 percent to close at ¥1,189.0 (about $15.68). Shares were up 5.5 percent to $15.50 this morning on Wall Street as of about 9:30.

“Many players seem to expect it to fall to around 700-800 yen,” a Japanese trader told the news service.

A “person familiar with the probe” confirmed to Reuters that the FBI is looking into the payment, which Olympus investigated on its own in 2009 (before it paid out most of the fee) but found no issues with the fee, which at nearly 32 percent dwarfs the usual fee for such services – around 1 percent, according to the news service.

“Please ask Messrs Kikukawa and Mori why they need another ‘independent’ third party committee investigation?” Woodford asked via an email to Reuters, referring to Olympus chairman Tsuyoshi Kikukawa and senior executive Hisashi Mori.

The former CEO also claims that the Japanese conglomerate switched auditors after KPMG AZSA & Co. advised against paying a portion of the fee in preferred stock.

Source: MassDevice