(REUTERS) -- Reuters found a Japanese banker who is a key figure in the Olympus Corp accounting scandal at a luxury apartment block in Hong Kong on Sunday, where he exploded in anger at finally being tracked down.
Akio Nakagawa's boutique U.S. investment firm earned a $687 million fee from Olympus for a 2008 deal that made it the biggest advisory payment in history, and which the Japanese camera maker now admits was used to hide investment losses.
The whereabouts of the former PaineWebber banker had been unknown until Sunday. Nakagawa looked startled when a reporter introduced himself outside the building, located in a high-priced area near the financial district on Hong Kong island.
Get out of here. Get out of here, Nakagawa yelled in English at the Reuters reporter who approached him. The banker, who appeared in his 60s and was with a middle-aged woman, was walking into the marbled foyer with some grocery bags.
I don't want him here, Nakagawa said, turning to a concierge, when asked to answer questions about the scandal, which has brought the once venerable maker of endoscopes and cameras to its knees.
Nakagawa was tanned, tall and slim. He wore large, dark round glasses and a sky-blue polo shirt and carried two plastic shopping bags with Japanese writing on them.
When asked about the advisory fee, he told the concierge: Please contact the police.
Nakagawa then moved quickly to an elevator and, while waiting for it to open, refused to answer further questions while the concierge blocked the Reuters reporter from getting closer.
It is the first time Nakagawa has been found and asked by the media for his side of the story since former Olympus chief executive Michael Woodford blew the whistle last month on the advisory fee and several other dubious deals.
Olympus has since lost half its market value and risks being delisted from the Tokyo stock market amid speculation the scandal could be linked to organized crime.
Nakagawa's name has appeared repeatedly in media coverage of the scandal, which is being probed by Japanese authorities, including police who deal with organized crime. The U.S. Federal Bureau of Investigation has been investigating the advisory fee, a source familiar with the probe has said.
Olympus, too, has said it did not know the whereabouts of Nakagawa but it has admitted the massive advisory fee was part of an elaborate accounting scheme to disguise investment losses stretching back to the 1990s.
The fee was earned on Olympus's $2 billion takeover of British medical equipment firm Gyrus in 2008 and was equal to roughly a third of the entire deal value, making it the world's most generous according to Thomson Reuters data.
It was earned by a U.S. investment firm run by Nakagawa and another Japanese banker, Hajime Sagawa.
TO MAKE FLY AWAY
Sagawa's whereabouts are still unknown. His wife, Ellen, has previously told Reuters at their home in Florida that she no longer knows where he is. The pair are reported by media to have filed for divorce since the scandal broke.
Reuters found a residential address for Nakagawa through an investigation of company filings in Hong Kong.
Two concierges, wearing grey suits, pointed at Nakagawa as he approached the apartment building and addressed him by name. He resembled a 1998 newspaper photograph of the banker, published alongside an interview with him in the Nikkei Financial Daily.
A receptionist at the apartment block had earlier told Reuters that a man called Akio Nakagawa lived there.
Sources have told Reuters that Nakagawa had business ties with Olympus stretching back three decades, including his time at PaineWebber in the 1990s when he helped the firm temporarily shuffle securities losses off its books in a practice known as tobashi that was common in Japan at the time.
Tobashi roughly translates as to make fly away.
Nakagawa struck out on his own in the late 1990s, starting Axes (Japan) Securities and joining Sagawa at U.S.-based affiliate Axes America, which signed a contract with Olympus in 2006 to advise it on deals.
Axes America later allocated a large share of the $687 million advisory fee to Cayman-based AXAM Investments, which has since been struck off the Cayman Islands registry. It is still unclear where all the money went.
The Gyrus fee was one of two major vehicles used by Olympus to mask securities losses. The other was its acquisition of three obscure, loss-making Japanese firms that have not been linked to Nakagawa or his firms.
(Additional reporting by Nathan Layne, Emi Emoto in TOKYO; Writing by Nathan Layne; Editing by Mark Bendeich and Dean Yates)