The Olympus financial scandal goes much deeper than anyone anticipates, fears the company's former CEO MIichael Woodford who was sacked last month after questioning suspicious payments.
In an interview with Amateur Photographer (AP) magazine Woodford also revealed that he would retain the camera business if reinstated as Olympus boss.
'It's probably the biggest financial story of the 21st century, but it's [about] where it goes... It's not just about the company it's about Japan,' said Woodford in an exclusive hour-long interview.
'A lot of people's lives are affected. The actions of a small group of people have taken a corporation to this point.'
The scandal has already forced the resignation of chairman Tsuyoshi Kikukawa - quickly followed by the dismissal of vice-president Hisashi Mori after Japanese investigators discovered Olympus had disguised losses on its investment activities with funds from other sources, since the 1990s.
Woodford compared the crisis to the Enron scandal, in terms of its potentially far-reaching implications.
'This issue of corporate governance is the number one news story in Japan. It's touching all the principles about how Japan, as a society, functions,' added Woodford who pointed to potential ramifications for large accounting companies that have worked with Olympus in the past.
'There's a lot of questions to be asked,' said the Liverpudlian, who believes the crisis strikes at the heart of a boardroom culture of 'sycophancy and yes-men'.
Just hours after he spoke, the New York Times (NYT) reported that Japanese officials were investigating Olympus for possible links to the Japanese criminal underworld. The paper also claimed last night that the scandal involves funds totalling at least $4.9m.
Olympus declined to comment on the NYT story when contacted by AP today but has previously denied links to crime gangs. It refuses to confirm or deny the sums involved.
Hunger for comeback
Far from being put off by the escalating crisis, Woodford is hungry to return to the company he joined 30 years ago.
He is gearing up to visit Japan next week, to help independent authorities in Tokyo probe the affairs of the 92-year-old firm.
So, if shareholders reinstate Woodford at the helm, where would this leave the camera division?
Since the controversy blew-up there has been speculation in the press that Olympus may sell off its camera business - retaining the much larger, more profitable, medical equipment arm.
'The camera business is stronger than it's been for several years but we have to see where Olympus's future goes,' he told AP.
'We have gone back into profit in the consumer business. I would keep it for the moment.
'If the business continues in its current form then “consumer” is certainly not in the area I am saying we should cut.'
Woodford hinted that he would have felt differently had he been in charge three or four years ago.
Though unwilling to make any long-term predictions, he feels that, in future, the camera side must be 'super-fit'.
Woodford, whose father was a photographer, joined Olympus KeyMed - which is based in Southend, Essex - in 1981 and worked his way up through the company.
A few years ago he consolidated Olympus's businesses in Europe and became president of the whole corporation on 1 April this year. Finally, just over a month ago, and only ten days into his job as CEO, he was dismissed.
Mirrorless camera future
Though he sees a big future for 'high-end superzoom' compact cameras it seems that Olympus's Pen-branded compact camera system (CSC) models have revitalised the business, and are key to the future of the camera division, giving it a platform to 'rebuild'.
'I am a great believer in product… we make world-beating cameras, wonderful lenses, sexy-styled bodies. We can do that – that's what I've learned as I've got closer to the camera business.'
However, he expressed frustration that Olympus did not have more resources to invest in a market that is becoming ever more competitive, and now pitching up against the likes of camera giant Nikon in the CSC arena.
The damage done to the brand's reputation by the widening scandal has left him 'depressed and saddened', yet he insisted Olympus is not fatally wounded.
'I wouldn't say I would be prepared to go back and run it if I felt it was too late, would I?'
Reluctant to speculate about how Olympus executed the cover-up of accounting losses, for decades, the former CEO repeated calls for 'forensic accountants' to act within weeks, if not days, to rescue the company from its 'current totally dysfunctional state'.
'To me there's nothing wrong with Olympus, except the most senior management, that's the weakness.'
He has called for the entire Olympus board of directors to resign, even those not directly involved in the scandal.
Before he was fired on 14 October, Woodford said he wrote six letters to the board over a month-long period. 'Not one of them [members of the board] stood up… This isn't a rogue trader. This is a boardroom – most of the board members were there when the transactions took place,' he asserted.
Asked about Olympus's initial threat of legal action against him after the firm's share price plummeted, he told AP: 'I'd have loved to have seen a court of law hearing “you did what, you paid an unsubstantiated $687m [fee] to unknown parties and paid it through the Cayman Islands?”.'
The absence of any formal lawsuit is not surprising in light of recent developments, he added.
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