By Reiji Murai
November 16, 2011 4:00 AM EST
Japan's disgraced Olympus Corp is preparing to take legal action, including possible criminal complaints, against any executives found responsible for the accounting scandal engulfing the firm, according to an internal staff email.
The memo, obtained by Reuters on Wednesday, was sent to Olympus employees the previous day by the firm's new president, Shuichi Takayama, who also vowed in the message to restore public trust in the once-proud maker of cameras and endoscopes.
Japan's securities watchdog, police and prosecutors are probing the 92-year-old company after Olympus admitted last week that it had hid investment losses for decades using funds from M&A deals. The U.S. Federal Bureau of Investigation and the U.K. Serious Fraud Office are also looking into the case.
A third-party panel appointed by Olympus to investigate the scandal is expected to report its findings in early December.
"We will wait for the third party panel to report, and we are preparing to take firm legal action, including criminal complaints, against any manager it finds responsible," Olympus President Takayama told its employees on November 15 in an internal e-mail, which was obtained by Reuters on Wednesday.
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The email did not name specific executives.
Investors are speculating that several Olympus officials will bear the brunt of any punishment for the scandal, hoping that the company itself will avoid the ultimate market sanction, a delisting from the Tokyo stock exchange.
"As long as market participants think that Olympus will not be delisted, the stock will continue to rise. The market is buying back what they sold last week," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Olympus' share price, which had lost as much as 80 percent of its value after the scandal broke last month, closed up more than 15 percent on Wednesday at 740 yen in heavy turnover. It was untraded with a glut of buy orders on Tuesday after rising its daily limit the day before.
In a sign regulators are getting serious after a slow start, Japan's Securities Exchange and Surveillance Commission (SESC) is considering recommending criminal charges against those involved in wrongdoing at Olympus, a source familiar with the matter has told Reuters.
The source said the SESC might also urge that Olympus be fined for false financial reports, a move that could allow the company to stay listed although that outcome is not assured.
The Bank of Japan also is trying to gather information from related financial firms about Olympus' past transactions, the central bank Governor Masaaki Shirakawa said.
"It is regrettable that doubts have arisen about the transparency and fairness of corporate management. It is vital that accurate information be disclosed promptly," Shirakawa said.
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