Former Olympus Corp CEO Michael Woodford met on Thursday with Tokyo prosecutors, who are investigating an accounting scandal at the company, a day before attending a board meeting for a showdown with the directors who fired him.

Woodford was also expected to meet police and officials at Japan's securities watchdog.

Olympus, which at first denied any wrongdoing, admitted this month it used M&A payments to help hide losses on securities investments for two decades, blaming three executives including former president and chairman Tsuyoshi Kikukawa.

But where the money trail leads is a mystery, fanning speculation of links between yakuza gangsters and the murky payments Olympus made for its acquisitions. Shadowy ties between crime syndicates and Japanese firms have existed for decades.

Tokyo prosecutors, police and the securities watchdog are conducting a rare joint probe of the scandal, and Kyodo news agency said Woodford had gone into the prosecutors' office on Thursday morning to answer questions about the case.

Shares in the 92-year-old camera and endoscope maker, which lost more than 80 percent of their value at one point, jumped in morning trade despite the scandal.

There is no basis for the stock to be up at this level ... In two weeks the company will announce its revised results, said Masayoshi Okamoto, head of dealing, Jujiya Securities.

What's going on in the market right now is just traders playing with fire until the company's announcement.

Olympus fired Woodford on October 14, asserting he did not understand Japanese culture or the firm's management style.

The 51-year-old Briton, who said he was axed for questioning

the M&A deals, fled to England and has campaigned for the firm to come clean. Big foreign shareholders have called for his return to run Olympus, which Woodford has said he was willing to do.

Woodford says Tokyo police, who have mobilized an organized crime unit to join the investigation, have a big role in uncovering the truth. The U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office are also investigating.

The metropolitan police to me is the one that probably has the capability to investigate this in the right way, a relaxed Woodford told reporters on Wednesday after a low-key return to Tokyo for the first time since his sacking.

CLEAN SWEEP FOR MANAGEMENT?

Woodford, like Kikukawa, who quit on October 26, is still an Olympus director since only shareholders can dismiss directors. Woodford had refused to come back to Japan because of safety concerns but says he is now confident police will protect him.

Speculation of organized crime links has swirled around the scandal. The firm said on Monday a third-party panel it set up to investigate the matter had found no evidence that organized crime syndicates, or yakuza gangsters, were involved in the M&A payments.

The payments included a massive $687 million advisory fee paid mostly to an obscure Cayman Islands firm.

The panel is due to report its findings in early December.

Woodford, who acknowledges he can be loud-mouthed and strong-headed, has called for a thorough investigation of the transactions and for a clean-out of top management.

But echoing calls by major foreign shareholders, Woodford said Olympus shares should not be delisted, in part to help ensure full disclosure of information.

The Tokyo Stock Exchange has placed Olympus on a watch list as a prelude to possible delisting. If the firm fails to meet a December 14 deadline for filing its financial statements for the six months to September, it will be automatically delisted.

The bourse could delist the firm even if it meets the deadline, depending on the scale of past financial misstatements or if proof emerges that it knowingly dealt with yakuza gangsters. That would effectively cut it off from capital markets and put it under pressure to sell off core businesses.

Big stockholders and a major governance advocacy group have also called for it not to be delisted. Olympus has said it would meet the December 14 deadline for filing its statements.

Its shares have more than doubled from a low hit on November 11 but are still down around 60 percent since October 14 when the scandal broke.

(Writing by Linda Sieg; Editing by Robert Birsel)