Japan’s Olympus has named a new board of directors as it tries to move on from a massive accounting fraud.
But some foreign investors – who have to vote on the changes in April – have expressed dissatisfaction with a management line-up that include an insider, its executive officer Hiroyuki Sasa, as president and former banker Yasuyuki Kimoto as chairman.
Major foreign shareholders had wanted outsiders in those two key positions at the maker of cameras and medical equipment.
Kimoto was formerly an executive of Sumitomo Mitsui Banking Corp, Olympus’s main lender. He now heads the Japan Research Institute, a think-tank linked with Sumitomo Mitsui.
Olympus also nominated as a board member Hideaki Fujizuka, a former executive of Bank of Tokyo Mitsubishi UFJ, which is another Olympus creditor
Their presence has increased concerns among some shareholders that Olympus’ creditors will use the chairman’s role for influence in the boardroom.
“We are extremely disappointed with the composition of the proposed board,” Josh Shores, senior analyst and principal at Southeastern Asset Management, one of the largest foreign investors in Olympus, said.
“While suggestions that the board be entirely new individuals, with a split chairman and CEO role have been taken into account, the clear creditor orientation of the board is unacceptable,” he said in a statement.
Current Olympus President Shuichi Takayama told a news conference that shareholders, including foreign investors, had not proposed alternative board candidates.
Olympus noted that the new 11-person board would include six outside directors, more than the current three. None of the existing board members have been re-nominated.
Olympus itself is suing for mismanagement five of its eight internal directors, including Takayama, and one of its three external directors, leaving it in a vacuum until the new board takes over after the April shareholders meeting.
The company has not nominated a CEO and declined to say whether Sasa or Kimoto would take on the position. The CEO’s role is usually held by either the president or the chairman.
“Looking at capital raising, to have a representative of the bank there as the chairman will only frustrate and alienate any independent foreign shareholder, and I’m sure shareholders in Japan,” said former Chief Executive Michael Woodford, who was fired in October after he raised concerns about the firm’s dubious book-keeping.
“It’s completely and utterly wrong,” he said.