THE entire board of scandal-tainted Olympus Corp is resigning, and a new president and chairman were tapped yesterday to lead a turnaround at the Japanese medical equipment maker.
The changes at Olympus, embroiled in controversy because of a cover-up of massive losses from the 1990s, will become final at the April 20 shareholders' meeting, it said in a statement. Changes to the board had been expected.
Hiroyuki Sasa, 56, with experience in the company's key medical equipment business, will become president, it said. Yasuyuki Kimoto, 63, former executive at Sumitomo Mitsui Banking Corp, which is Olympus' main bank, will become chairman. Their appointments need shareholders' approval.
Sasa promised to win back public trust, and carry out reforms to prevent a recurrence of the dubious bookkeeping that has sent Olympus shares plunging. He said governance will be beefed up. The new 11-member board, named yesterday, includes six outside members.
"My duty is to win back as soon as possible the trust from everyone and repair this damaged brand," Sasa said.
The scandal surfaced late last year when then Olympus President Michael Woodford raised questions about huge payments for financial advice and acquisitions of firms unrelated to the its mainstay businesses.
Tokyo-based Olympus at first denied any wrongdoing but later acknowledged it hid 117.7 billion yen (US$1.5 billion) in investment losses dating back to the 1990s.
Earlier this month, three former Olympus executives, including its ex-chairman, were arrested on suspicion of orchestrating the cover-up.
Tsuyoshi Kikukawa, the ex-chairman, quit all his Olympus posts last year. The firm is suing him and 18 other former and current executives for damages in the cover-up.
The deception, which only came to light because Woodford blew the whistle, has raised serious questions about corporate governance in Japan, and whether major firms are complying with global standards.
Olympus has carried out an independent panel and found some executives were involved in the deception.