Shares in Olympus Corp plunged 22 percent on Monday after media reports quoted its ousted chief executive as accusing the board of firing him for probing allegations of improper payments related to acquisitions.
The drop in the share price follows an 18 percent fall on Friday after the precision instrument and camera maker fired Michael Woodford, prompting a slew of brokerage downgrades.
It's natural for a company's shares to drop like this after such shocking news, and with management direction so unclear, said Fujio Ando, senior managing director at Chibagin Asset Management, which does not hold Olympus shares.
Woodford, 51, was sacked on Friday, just two weeks after the company had promoted him from president with glowing reports on his performance.
In an interview in the Wall Street Journal, 30-year Olympus veteran, Woodford, said he had asked the chairman, Tsuyoshi Kikukawa, to resign over serious governance concerns.
Olympus officials were not available to comment to Reuters. In a statement reported by the Nikkei business daily, an Olympus official said the company had acted properly in its accounting of previous acquisitions.
Japanese boards rarely dismiss top executives, so the announcement took financial markets by surprise.
A spokesman at the Tokyo Stock Exchange said he was not aware of the media reports and declined to say whether the bourse would begin any probe into Woodford's reported allegation. On Monday, major local media outlets largely ignored the ongoing board tussle at Olympus.
Analysts said the dismissal could deal a blow to the ambitious cost-cutting plans at Olympus that Woodford had championed. He was credited with successfully cutting costs in the company's European division.
Olympus's operating profit dipped 41 percent to 35.4 billion yen in ending March 31, 2011, as its struggling camera division lost 15 billion yen.
Deutsche Securities cut its rating on Olympus to hold from buy, the latest in a growing list of brokerages to downgrade the stock.
The dismissal of the president has shattered equity market expectations of structural reform at the firm, Deutsche analyst Yoshikazu Higurashi wrote in a report.
Nomura, Citigroup, JPMorgan and Daiwa Securities also cut their ratings on Olympus.
Kikukawa will take over as president and chief executive, roles he had stepped away from to allow Woodford's appointments.
Olympus said Woodford circumvented the company's management structure by giving orders directly to staff, and said there had been differences over restructuring the R&D division.
(Additional reporting by Lisa Twaronite; Editing by Edwina Gibbs and Anshuman Daga)