Lenders plan to meet Japan's scandal-hit Olympus Corp as early as next week to negotiate more security over their loans as the company moves to the brink of delisting from the stock market, the Nikkei newspaper said Friday.

The disgraced maker of cameras and medical equipment is being investigated by police and regulators after it admitted this week to hiding investment losses for decades and using part of $1.3 billion (817 million pounds) in M&A payments to aid the cover-up.

The Nikkei said the concealment could have stood at more than 130 billion yen (1.05 billion pounds) at its peak.

Olympus creditors such as Sumitomo Mitsubishi Banking Corp are requesting a meeting next week, where they are likely to press the company for a change in lending terms given the likelihood of a delisting of its stock, the Nikkei said.

Delisting would effectively leave the 92-year-old company cut off from equity capital markets at a time when its shares have already lost three-quarters of their market value and its balance sheet is vulnerable to major asset writedowns.

The stock see-sawed wildly in heavy trade Friday, losing as much as 10 percent to 435 yen in an initial wave of selling then recovering within minutes to register a small gain. It last traded at around 505 yen, up 4 percent on Thursday's close.

Olympus had about 703 billion yen in short-term and long-term borrowings on its books as of June 30, including corporate bonds.

Tokyo's stock exchange has told Olympus it will be delisted after 62 years as a publicly traded stock if it fails to report earnings by December 14, deepening concerns about its future. Olympus says it aims to meet that deadline.

Its largest foreign shareholder, Southeastern Asset Management, has said delisting would have vast negative ramifications for foreign investment in Japan.

The parties who are responsible for this, the past management teams and the board of directors, are the ones who need to be sanctioned and the good parts of Olympus need to be protected for the good of the public, the staff, not to mention the shareholders, Josh Shores, a principal at the fund manager, said Thursday.

Nikkei's report Friday said Olympus had hid its long-standing investment losses behind a facade of inflated bank deposits and securities holdings, a wall of assets which reached its peak at end-March 2005.

Quoting unnamed sources, it said Olympus had moved the impaired securities off its books -- a trick known in Japanese as tobashi -- to prevent painful writedowns that would have followed the adoption of fair value accounting in fiscal 2000.

CORPORATE GOVERNANCE GLOOM

Olympus admitted to the concealment Tuesday, having spent weeks denying allegations by its ex-CEO of improper accounting and questionable deal-making. It said the evidence of wrongdoing had finally been unearthed by a third-party committee it had commissioned last week to probe the claims.

The Tokyo Metropolitan Police Department has begun looking into the case while, the Nikkei said, tax authorities appeared to be focussed on whether any individual or corporate income was hidden as part of the cover-up of investment losses.

Olympus shares started tumbling in October after sacked CEO Michael Woodford went public with his assertions. Woodford says he was sacked for asking questions internally about several unusual M&A payments, but Olympus says he was fired for his management style and lack of understanding of Japanese culture.

The Olympus affair has also fanned broader concerns about corporate governance in Japan, which has long had its critics.

Seeking to ease those worries, Financial Services Minister Shozaburo Jimi told a news conference Friday that the corporate governance of other listed companies should not be called into question because of Olympus.

But Olympus is not the only scandal catching attention.

Daio Paper Corp shares were untraded Friday, having been put on the stock exchange's supervisory list the day before because Daio said it would likely miss a November 14 deadline for posting its first-half results.

Mototaka Ikawa, 47, who stepped down as Daio chairman on September 16, borrowed 10.6 billion yen from seven Daio subsidiaries and diverted the money to his own accounts, the firm revealed last month.

(Reporting by Soham Chatterjee in Bangalore; Writing by Linda Sieg; Editing by Mark Bendeich)