The Big Event

The event that led to this controversy to commence goes back to the early 1990’s. Olympus, a Japanese company that sells medical devices, cameras and other devices, had lost a lot of money from poor investments. The total lost was 100 billion yen (730 million dollars). This was due to many different reasons with the Yen’s value weakening at the time, as well as both poor and risky investments Olympus had made. In order to cover up these losses, a strategy was made to sell the losing investments at the original price. Olympus then proceeded to purchase a handful of businesses with little value and no relation to Olympus. This was done to look as though they had lost money this way. Olympus now had the ability to store these losses in the accounts of these newly purchased businesses. All of these actions were done to cover the losses and save the jobs of many members such as ex CEO Tsuyoshi Kikukawa. These irregular and unethical payment methods were termed as tobashi schemes, meaning that losses can be gone by transferring the losses from one account to another. However, in 2011, Michael Woodford became chief executive of Olympus Corporation. He later learnt about the fraud ex members committed in company’s past and was fired. Woodford then exposed the details of the scandal led by Tsuyoshi Kikukawa, leading to the arrests and fines of him and other former board members involved in the scandal.

PublicDomainPictures, "Packs Pile Money Finance Currency Crisis Success", 7/19/2013 via pixabay

Public Domain Dedication License