The British ex-CEO of Japan's Olympus Corp emerged from a frosty meeting of directors on Friday convinced its board would eventually quit over an accounting scandal engulfing the firm, but he said he wasn't begging to return and clean up the mess.
Michael Woodford, still an Olympus director despite being fired as CEO and blowing the whistle over the scam, described the meeting as a tense encounter with no handshakes or apologies offered from the men who had sacked him barely a month ago.
Instead, he said, the board had agreed that the once-proud maker of cameras and medical equipment should strive to avoid being delisted from the Tokyo stock exchange, a sanction that would make the business more vulnerable to takeover.
I just see a lot of suffering and misery for no gain, Woodford said of the prospect of a delisting.
But we should have the investigation, it shouldn't be fudged, he told a news conference after the almost-two-hour meeting at Olympus's Tokyo headquarters, where he was mobbed by reporters and TV crews as he entered and left the building.
Woodford, back in Japan for the first time since fleeing the country right after his October 14 sacking, said there had been no talk at the meeting of him returning to his former post.
I'm not begging to come back, he said, though he added that he was willing to do so if shareholders desired it. I didn't volunteer for this, I'm not a hero, he added.
There was a tension in the room, but there seemed to be an understanding that it was in no one's interest to raise the temperature, he said. They didn't shake my hand and I didn't offer mine. We said good morning and goodbye.
Major foreign shareholders have called for Woodford to be immediately reinstated, saying he can restore faith in the 92-year-old firm.
The visit by Woodford, who also met this week with police and other investigators probing the scandal, coincided with a rally in Olympus shares, which have been buoyed by speculation the firm can escape delisting.
The stock rose as much as 25 percent on Friday before closing up 8.6 percent at 1,107 yen. It has rebounded a whopping 77 percent in just four trading days, though it is still down more than half since the day before Woodford's dismissal.
Woodford said Olympus could survive as an independent entity as long as banks, so far supportive, kept backing it.
DUBIOUS DEALS, CRIME SUSPICION
Olympus had fired Woodford, a rare foreign CEO in Japan, alleging he had failed to adapt to Japanese culture and the company's management style. Woodford says he was axed for questioning dubious merger and acquisition payments.
Suspicion has swirled about possible links between the payments and organised crime. Woodford said he had no firm proof of gangster links but urged authorities to follow the money.
That would be concerning if organised crime was involved ... but there's no evidence of that to date, he said.
The 51-year-old freckle-faced Briton had left Japan after his dismissal citing concerns for his safety.
Olympus first denied any wrongdoing, but later admitted it had hidden investment losses from investors for two decades and used some of $1.3 billion in M&A payments to aid the cover-up.
Woodford said after Friday's board meeting that the top priority was for Olympus to meet a December 14 deadline for filing its financial statements for the six-months to September -- after which, he added, current management should go.
The company would be automatically delisted if it misses the deadline. Even if it meets the deadline, the Tokyo Stock Exchange can still delist it, depending on the scale of past misstatements or if a link is found to yakuza gangsters.
A third-party panel appointed by Olympus to look into the accounting scam said this week that it had not yet found any evidence of involvement by organised crime.
The Olympus affair has raised questions about whether its auditors, the Japanese arms of global giants KPMG and Ernst & Young, should have done more to follow up on red flags.
KPMG'S chairman, Michael Andrew, on Friday called for a global set of standards for the auditing industry but said that KPMG had done the right thing in the actions it took pertaining to the Japanese company.
What is pretty evident to me is that it is a very, very significant fraud, Andrew said in a speech in Hong Kong. We should wait for the Japanese authorities to disclose that.
I think it is very hard to jump to the conclusion that it's a corporate governance failure, he said.
The scandal has also revived criticism of corporate governance in a country that Woodford said needed people who would challenge and scrutinize. He also took a swipe at mainstream Japanese media for being slow to cover the scandal.
What Japan should do is look around the world for the best human resources ... It would be sad if no more gaijin come, he said, using the Japanese word for foreigners.
On the eve of the board meeting, two Olympus directors and an internal auditor blamed for the scandal quit and the president announced that current management was ready to step down once the firm's recovery was on track.
Current president Shuichi Takayama should stay until December 14, but changes could start thereafter, Woodford said, adding that his fellow directors seemed to realize they would have to go but had given no explicit commitment to resign.
Woodford also said Japanese authorities probing the scandal, whom he met in Tokyo on Thursday, wanted to talk to him again.
Tokyo police, prosecutors and regulators have launched a rare joint probe of the scandal. The U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office are also looking into the affair.
Shareholders have asked Olympus to seek more damages from former and current executives if they are found to have caused losses to company value through acquisitions at the center of a scandal, the company said in a statement on Friday.
(Additional reporting by Yoko Kubota, Taiga Uranaka, Lisa Twaronite and Mayumi Negishi; Writing by Linda Sieg; Editing by Mark Bendeich)