OLYMPUS Corp is preparing to issue about US$1.28 billion (100 billion yen) in new shares to bolster depleted finances, with Sony, Fujifilm and Panasonic seen as possible buyers, the Nikkei business daily reported yesterday.

The report comes after a warning from one of the camera and endoscope maker's leading shareholders that the scandal-tainted board may try to retain control by issuing new shares to dilute the power of existing shareholders.

Olympus shares surged by their daily limit yesterday, after falling for four straight sessions on worries about how capital-raising may dilute existing shareholdings, with investors seeming to shift their focus to the firm's finances.

"Some people are obviously seeing that this will add to its net assets and contribute to the financial health of the company and increase the value of the company," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

Olympus last week announced restated accounts for the past five years as it struggles to sort out a US$1.7 billion accounting scandal dating back to the 1990s, whittling its net assets down to just 45.9 billion yen (US$588.9 million).

Tennessee-based Southeastern Asset Management, which holds 5 percent of Olympus stock, said it feared moves to bring in a new investor would sink a campaign to reinstate former CEO Michael Woodford, who blew the whistle on the accounting scandal after he was fired.

Woodford says he's close to releasing the names of an alternative team of directors.