Former Olympus CEO Michael Woodford said that after meeting with Tokyo police, prosecutors and regulators on Thursday he was confident they would do a thorough job in investigating an accounting scandal engulfing the disgraced camera maker.

It's clear they're going to investigate, they're not going to leave any part of this story untold and they're going to turn all the stones over, the 51-year-old Briton told reporters.

The talks have passed all my expectations ... and it's very evident to me they are going to investigate this whole issue without bias and thoroughly, and that will include following the money flows in relation to all the transactions.

I'm immensely encouraged. I've been treated with great courtesy and I'm much more confident than I thought I would be with what I've been told.

Woodford returned to Tokyo on Wednesday for the first time since he fled the country after being fired as CEO on October 14, having blown the whistle on some large and dubious payments related to acquisitions by the company.

Olympus Corp, which at first denied any wrongdoing, admitted this month it used M&A payments to help hide losses on securities investments for two decades, blaming former president and chairman Tsuyoshi Kikukawa, former vice president Hisashi Mori and internal auditor Hideo Yamada.

But where the money trail leads is a mystery, fanning speculation of links between yakuza gangsters and the murky payments Olympus made for its acquisitions. Shadowy ties between crime syndicates and Japanese firms have existed for decades.

Kyodo news agency said prosecutors had questioned Mori and Yamada on a voluntary basis and would also quiz Kikukawa.

Woodford was due on Friday to attend an Olympus board meeting for a showdown with the directors who fired him.

Shares in the 92-year-old camera and medical device maker, which lost more than 80 percent of their value as the scandal unfolded, jumped more than 17 percent on Thursday.

There's no basis for the stock to be up at this level, said Masayoshi Okamoto, head of dealing at Jujiya Securities.

What's going on in the market right now is just traders playing with fire until the company's announcement. Olympus is due to announce its revised results by December 14.


Olympus fired Woodford as CEO, asserting he did not understand Japanese culture or the firm's management style.

His return to Tokyo caps a remarkable turnaround for a rare foreign senior executive in Japan. After being sacked, he was told his driver would no longer be available and he should vacate his apartment. Someone Woodford trusted suggested he leave Japan immediately for his own safety, which he did.

Woodford, who said he was axed for questioning the M&A deals, fled to England and has campaigned for Olympus to come clean. Big foreign shareholders have called for his return to run the company, which Woodford has said he was willing to do.

Woodford says the Tokyo police, who have mobilized an organised crime unit to take part in the probe, have a big role to play in uncovering the truth. The U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office are also investigating.


Woodford, like Kikukawa, who quit on October 26, and Mori, who was fired, is still an Olympus director as only shareholders can dismiss directors.

Speculation of organised crime links has swirled around the scandal. Woodford had refused to come back to Japan because of safety concerns, but says now he is confident police will protect him.

Olympus said on Monday a third-party panel it set up to investigate the matter had found no evidence that organised crime gangs were involved in the M&A payments -- which included a massive $687 million advisory fee paid mostly to an obscure Cayman Islands firm.

Woodford, who acknowledges he can be loud-mouthed and strong-headed, has called for a thorough investigation of the transactions and for a clean-out of top management.

But, echoing calls by major foreign shareholders, Woodford said Olympus shares should not be delisted, in part to help ensure full disclosure of information. Delisting could cut Olympus off from capital markets and put it under pressure to sell core businesses.

Nippon Life Insurance Co, one of Olympus' biggest shareholders, repeated on Thursday it would back the firm. The insurer and its subsidiaries recently cut their stake to 5.11 percent from 8.18 percent.

Nippon Life Senior Managing Executive Officer Yasuomi Matsuyama told a news conference the affair was regrettable, but appeared to be the work of a small number of executives.

Olympus, with a 70 percent global share of endoscopes, is an important company that represents Japan and has technological prowess, he said.

(Additional reporting by Rie Ishiguro, Taiga Uranaka and Mari Saito; Writing by Linda Sieg; Editing by Dean Yates and Ian Geoghegan)