Singapore's sovereign wealth fund said on Saturday it has sold most of its holdings of Olympus Corp <7733.T> on concern about wrongdoing, the first major shareholder to show it had lost confidence in the scandal-hit Japanese medical device and camera maker.

Japanese authorities are investigating Olympus after the company admitted this week that it hid investment losses for decades using funds from M&A payments. Media reports on Saturday said police and regulators were joining forces in a rare collaborative effort to examine the cover-up.

GIC , which is the acronym for Government of Singapore Investment Corp, was the 10th biggest shareholder in Olympus, with 2.17 percent as of the end of March, according to the latest Olympus annual report.

GIC disposed of almost all of its investments on first suspicion of possible wrongdoing in Olympus, the Singapore fund said in a statement.

GIC added it had only an insignificant holding under a portfolio managed by an external fund manager. It said the majority of its investment was made in the midst of the global financial crisis.

The Tokyo District Public Prosecutors Office's special investigations unit, the Tokyo Metropolitan Police Department and the Securities and Exchange Surveillance Commission (SESC) will team up to investigate the Olympus cover-up of investment losses, Japanese media reported on Saturday.

Nikkei has said the concealment could have exceeded 130 billion yen (1.04 billion pounds) at its peak, and said the company's creditors were likely to press for a change in lending terms.

Lenders will confront Olympus next week to demand an explanation on its accounting, a banking source said on Friday, though he denied reports they would seek more security over their loans.

Tokyo's stock exchange has told Olympus it will be delisted if it fails to report earnings by December 14, which could effectively leave the 92-year-old company cut off from equity capital markets at a time when its shares have already lost more than three-quarters of their market value since the scandal erupted on October 14.

Olympus plans to correct 20 years of its financial statements and submit them to financial authorities, the Mainichi newspaper reported on Saturday.

Delisting would take effect on January 15 in principle if Olympus does not meet the reporting deadline. Even if Olympus meets the deadline, the bourse could still decide to delist the company, depending on the scale of its past misreporting.

The bourse placed Olympus on its supervisory list on Thursday, which means short-selling of its shares is restricted. But such trading had already been suspended by Japan Securities Finance, the processor of margin transactions.

LOSING MONEY

Sixteen investment trusts managed by Nomura Holdings Inc. <8604.T> group member Nomura Asset Management Co. have recently held Olympus in their portfolios, Nikkei also reported.

Eleven stock-index-linked mutual funds held a total of roughly 1.9 billion yen in Olympus shares as of Wednesday, and five more fund of funds owned shares as of September 30. The asset manager disclosed the information because of the possibility that Olympus will be delisted, Nikkei said.

Nomura Holdings, Japan's largest investment bank, said Olympus was its client but that it wasn't involved in any of the transactions at the centre of the scandal.

Nikkei reported separately, quoting sources, that a majority of the 100-plus businesses acquired during former Olympus President Tsuyoshi Kikukawa's tenure are losing money. Kikukawa stepped down on October 26.

Most of the acquired firms, in areas such as pet care services, DVD production and others with little apparent connection to core Olympus operations, were unlisted and therefore not required to make their financial details public, Nikkei said.

Olympus President Shuichi Takayama on Tuesday blamed Kikukawa, Vice-President Hisashi Mori and internal auditor Hideo Yamada for the cover-up, and said he would consider criminal complaints against them. Mori was dismissed on Tuesday, and Hamada offered to resign.

The SESC, Japan's securities regulator, plans to take voluntary testimony from Kikukawa and two other current and former officials said to be involved in the investment cover-up, Nikkei said.

The report said the regulator also plans to hear as early as next week from former Olympus head Michael Woodford, who was ousted on October 14 - six months after being made president and just two weeks after becoming CEO - due to what the company said were management issues. Woodford subsequently made public some of the contentious M&A deals.

A third-party panel is now examining those acquisitions, and accounting experts have said the investigation could lead to asset writedowns of more than 70 billion yen, though Olympus' big and profitable medical business is likely to emerge unharmed.

The independent panel's head, retired Supreme Court justice Tatsuo Kainaka, told Reuters his team may recommend criminal charges in its report, to be completed early next month.

(Editing by Robert Birsel)