Japan's Olympus Corp on Thursday stuck to its defence of the deals that have come under fire since it axed its British CEO in a bitter boardroom battle, but the Tokyo Stock Exchange (TSE) warned that investors might not be convinced.

TSE officials said the scandal surrounding the acquisitions by the endoscope and camera maker, which has knocked more than 45 percent off the company's share value, could erode trust among global investors in the Japanese stock market.

Current executives were involved in the problems that have been pointed out. So there are concerns that investor confidence in information provided by the company may decline, said Masaki Shizuka, TSE senior executive officer.

The Tokyo Stock Exchange is deeply concerned because trust held by investors all around the world in our country's stock market could be damaged, he told a parliamentary panel, without saying what other action the bourse might take against Olympus.

Olympus Chairman Tsuyoshi Kikukawa resigned on Wednesday in a bid to restore confidence in the 92-year-old firm after revelations from ex-CEO Michael Woodford that it had paid a massive advisory fee for its acquisition of British medical equipment maker Gyrus in 2008.

Shares in Olympus soared 23 percent on Thursday, but market players said the short-covering rally was not a vote of confidence. The stock is still down close to half from levels before the company fired Woodford on October 14.

At a news conference in front of more than 100 reporters, new President Shuichi Takayama calmly defended the deals, including the purchase of three domestic firms -- a microwaveable cookware maker, a medical waste recycler and a cosmetic firm that together employ around 120 people.

He also blamed the share price fall on Woodford for revealing internal information.

If this secret information hadn't been leaked there would have been no change in our corporate value, he said.

The internal documents leaked by Woodford show Olympus spent $773 million (483 million pounds) on the three domestic firms, an amount that has since been largely written off.

It was our strategy to find new growth areas to reduce our over-reliance on the endoscope business. These three acquisitions were part of that strategy, Takayama said.

The affair has caused consternation over management of the company and fanned concerns generally about Japan's corporate governance.

This was not an adequate explanation of whether the fundamental values of the acquisitions were reasonable and likely will not win back the trust of investors, said Shigeo Sugawara, a senior investment manager at Sompo Japan NipponKoa Asset Management.

Today's explanation was meaningless because it's limited to a disclosure of information from within the company, when a third-party investigation is what's needed.

Olympus defended its handling of the Gyrus deal and said the mammoth advisory fee was justified.

It paid $2.2 billion for the firm in 2008 and handed a record $687 million in advisory fees to two obscure firms, which Woodford has identified as New York-based AXES America LLC and Cayman Island-based AXAM Investment Ltd.

It will pay off considering what value we will gain from the Gyrus acquisition in the future, Takayama told the news conference.

The advisory fee is equal to about a third of the acquisition price, making it the largest fee in M&A history based on Thomson Reuters data. Advisers usually take home about 1 percent or less of the transaction value.

SECRET INFORMATION

Olympus fired Woodford just two weeks after his appointment as CEO, saying he failed to understand the company's management style and Japanese culture. Kikukawa then took over Woodford's role.

Woodford says he was sacked for questioning the advisory fee for the Gyrus purchase as well as the three other deals, and for urging Kikukawa to step down.

Japanese media, which at first paid little heed to the dispute, appear to have woken up. Takayama's news conference was extended to around 100 minutes after angry reporters insisted on more time.

We have more questions and you haven't cleared up all our doubts, one Japanese reporter blurted out.

The scandal is the biggest in Japan since Livedoor entrepreneur Takafumi Horie's challenge to the business establishment ended with charges of securities fraud on 2006.

Market players said the jump in Olympus's share price did not imply an easing of investor concerns.

This is short covering following the steep drop. (Investors) are not buying because of what the company said, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Share prices won't return to their appropriate market price level until a thorough report by a third party is issued.

Pressed by big institutional investors, Olympus has agreed to appoint a third-party panel to look into the deals.

Experts said the company's management -- as is often the case in Japan -- was hoping to hunker down and weather the storm but that the saga was probably far from over.

It's going to be like an onion -- things will come out in layers, said Darrel Whitten, managing director of investor relations consultancy Investor Networks.

Japan's Securities and Exchange Surveillance Commission, the securities watchdog, is also looking into the company, sources familiar with the matter told Reuters.

Woodford has said he was now talking to the U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office.

(Additional reporting by Taiga Uranaka, James Topham and Lisa Twaronite; Writing by Tomasz Janowski and Linda Sieg; Editing by Dean Yates and Edmund Klamann)