Shareholders of Olympus Corp <7733.T> approved a new board on Friday, hoping for a fresh start at the camera and medical device maker that hid $1.7 billion of investment losses in Japan's biggest corporate scandal in decades.
At a sometimes rowdy extraordinary meeting in a Tokyo hotel, local institutional investors and Olympus' lenders and suppliers voted for a new management slate and approved five years' worth of restated company accounts.
The firm's British ex-CEO, whose dismissal six months ago blew the lid off the accounting scandal, said he may seek to have the vote annulled as Olympus executives refused to explain why he had been sacked for gross misconduct. Woodford has begun legal action against his former employer in Britain.
While Olympus will hope the vote draws a line under a scandal that has wiped more than $4 billion off its market value, Woodford and foreign investors, who own 25-30 percent of the company, have sought a change in a deep-rooted culture of cross-shareholdings and cozy ties between banks and boardrooms.
Olympus' new president will be 30-year company veteran Hiroyuki Sasa, and new chairman is Yasuyuki Kimoto, a 63-year-old former executive from the Sumitomo Mitsui Financial Group (SMFG) <8316.T>, owner of a 3.4 percent stake and the company's main lender with $2.8 billion in outstanding loans and bonds.
Big lenders such as SMFG and Mitsubishi UFJ Financial Group (MUFG) <8306.T> are often key investors in Japanese companies, giving them influence in board decisions - close ties that were welcomed by shareholders arriving for Friday's meeting.
The banks are there ... they will help in terms of capital, Eiichi Suzuki, 60, told Reuters. The company already has first-class technology, so now it's a matter of management.
Sasa said his mission was to fix the damaged brand and win back trust as soon as possible.
Woodford, who has said he feared for his life during the early days of the scandal and has since rushed to print his book, Terminated, on the affair, said it was a mockery for Olympus to claim it was making a new start. It's why the world looks on and continues to think this world works in a completely different way, it's Alice in Wonderland, he told reporters.
At the start of the 3-hour meeting, which drew a crowd of 1,000 shareholders, outgoing Olympus president Shuichi Takayama and his board stood and bowed deeply in a traditional gesture of public apology.
Woodford told the meeting that refusing to explain his sacking will constitute clear grounds for this EGM to be later cancelled in court.
He later told Reuters he would discuss the issue with lawyers. When they have lost nearly $2 billion, is the new management going to accept that my dismissal was related to telling the truth and apologize or are they going to support this bunch of yes men and the ludicrous statements they have been making, he said.
Since Woodford was fired on October 14, Olympus has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s. Law enforcement agencies in Japan, Britain and the United States are investigating. Seven people have been arrested, including a former chairman.
High on the new board's to-do list will be whether to seek a cash injection, possibly through a capital tie-up in its medical business. Sony <6758.T>, Panasonic <6752.T> and Fujifilm <4901.T> have been cited as potential partners.
Olympus' restated earnings statements showed net assets dwindled to 46 billion yen as of end-September. The company's equity ratio of just 4.4 percent, compared with about 30 percent at its rivals, suggests it needs to raise some 150 billion yen ($1.84 billion) in fresh equity.
Olympus shares jumped 6.4 percent on Friday, their biggest gain in three months. The stock slumped 80 percent as the accounting fraud unfolded in October, but has since rallied to half the pre-scandal level, valuing the company at $4.1 billion.
Olympus has estimated a $410 million loss for the year just ended. Before the scandal it had forecast a profit of $221 million.
($1 = 81.5450 Japanese yen)
(Additional reporting by Edwina Gibbs, Writing by Ian Geoghegan, editing by Jonathan Thatcher)