Michael Woodford faces a tough battle to regain the top job at Japan's Olympus Corp <7733.T> and repair the damage of a $1.7 billion (1.1 billion pound) accounting fraud he helped uncover -- few Japanese shareholders or staff can be heard calling for his return.

Only 300 people have lent their names to an online campaign for his reinstatement as chief executive, set up last month by a former director , compared with the workforce of 40,000 people at the maker of cameras and medical equipment.

Even on an anonymous basis, barely 100 have added their voices to a rather muted cause, with some online comments citing doubts about his plans for the once-proud firm.

That is one reason for the awkward silence from Olympus's Japanese shareholders, who own about 70 percent of the firm, and lenders. Support from both would be essential for Woodford, 51, to resume his place as a member of a rare corporate species, foreign CEOs in Japan.

The biggest Japanese shareholders, such as leading insurers and banks, are normally reticent, but one senior banker familiar with their thinking said they had noted employees' lack of enthusiasm about a Woodford comeback and some were privately opposed to his return.

Many shareholders are sceptical about his ability to run the company after all these problems, said the banker, who declined to be identified due to the sensitivity of the issue.

Even if Woodford did the right thing by revealing past wrongdoing at Olympus, that does not mean employees will welcome his return. That is why investors don't really like the idea of his coming back..., he added.

By contrast, some major foreign shareholders, such as UK-based fund manager Baillie Gifford, believe the straight-talking Englishman is the ideal man to turn the page on a sorry chapter in the 92-year-old history of the once well-respected firm.

Woodford, the only top executive willing to question Olympus's dubious accounting and suspicious deal-making at board level, has a reputation as a keen cost-cutter and, after 30 years working his way up the company, he knows where the fat is.


What Olympus needs now is a thorough clean-up and we believe Michael Woodford is the best man for the job, Baillie Gifford's head of developed Asia equities, Elaine Morrison, said in a statement on November 10 as Olympus shares were in full melt-down.

The freckle-faced Woodford shot to fame on October 14 when the Olympus board voted unanimously to sack him for what they described as his abrasive management style and a failure to understand Japanese culture.

Woodford immediately turned whistleblower, leaving Japan that day for Britain where he aired his concerns over some murky acquisition payments made by Olympus to obscure, offshore firms -- payments ultimately revealed to have been used in a massive scheme to cover up investment losses.

Now, the board that sacked him is in disgrace and committed to resigning en masse -- but not before they pick their own successors in hopes of fending off Woodford's bid to return to his old post with his own hand-picked directors.

So far, not one of the big Japanese institutional investors, who made up around half of the Olympus share register at the end of March, have spoken out publicly in support of Woodford's return.

Nippon Life, the biggest Olympus shareholder before cutting its holding to 5.11 percent last month, declined to comment on Tuesday but has said previously that it remains undecided.


Woodford returns to Japan late on Tuesday for the second time since his sacking, this time to try to persuade shareholders, lenders and employees to support his comeback and to back his own slate of candidates for a new board.

Woodford's return coincides with the Wednesday deadline for Olympus to publish its second-quarter financial results in order to keep its stock market listing.

With the existing board showing no signs of meekly surrendering the keys to the boardroom to Woodford, the stage is instead set for a proxy battle for the support of shareholders.

It's a battle that will require determination, a quality Woodford has shown in abundance throughout his career.

As far as I know, everyone has a lot of respect for him. He speaks out, he's quite a forthright person, he doesn't suffer fools gladly. He speaks his mind, said John L. Lamb, a local councillor at Southend-on-Sea, the British home of Olympus subsidiary KeyMed, which Woodford ran in the 1990s on his way to the top.

Lamb dealt with Woodford on a range of issues, including one close to the former CEO's heart, road safety, and said his strong views had lead to some robust and forthright discussions.

He doesn't roll over but neither do we, Lamb said.


He does not speak Japanese but often mentions his romantic attachment to the country, enjoying karaoke, hot springs and sushi. And despite his reputation as a cost-cutter, he has said that he would avoid large-scale layoffs in Japan.

We won't make compulsory redundancies in Japan, Woodford told Reuters in May after becoming Olympus president. If a company is profitable it would be obscene almost in Japan. Because if you lose a job in Japan it's completely different. The mobility of the job market is something different.

In the end, Woodford is viewed as neither the traditional Japanese manager nor as a turnaround expert in the mould of Lebanese-Brazilian Carlos Ghosn, who was parachuted in to pull carmaker Nissan Motor <7201.T> out of a rut in 1999.

Woodford was a trade unionist in his early days and largely unknown outside the firm where he spent his working life.

The company is facing tough times, so what's needed is a crisis manager, said Hirofumi Hirano, managing director of Alix Partners, a consultancy specialising in business turnarounds.

Hirano did not know Woodford nor comment on his suitability, but he said Olympus needed a leader who could streamline the business with the support of lenders and shareholders.

He (a new CEO) will have to regain the trust of lenders and shareholders. He will also have to explain what went wrong to Olympus employees, Hirano said.

So far, many employees seem unconvinced by Woodford, a potential problem in a corporate culture where experts say their support would prove critical to his campaign. About a third of Olympus's workforce is based in Japan.

Many current employees tell me: 'We don't understand Mr Woodford's thinking', 'We want to know what he plans to do with Olympus', said former Olympus director Koji Miyata, who started the online campaign to drum up staff support for Woodford's return.

Woodford plans to address those concerns at a presentation aimed primarily at employees, which is to be broadcast live on the Internet on Wednesday, but he faces an uphill battle.

(Additional reporting by Taiga Uranaka, Emi Emoto, Yoko Kubota, Junko Fujita and Chikafumi Hodo in TOKYO and Yeganeh Torbati in LONDON; Editing by Mark Bendeich)