New Olympus CEO fired after raising questions on $1.5B in hidden losses

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700M, gtfo.

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Now you know how I made dough.

That is some f'd up shite, get hired to do a job then get summarily discharged for doing said job digging into and asking questions of inside crooks/cronies.

Well, that turned out about as well as expected:

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Olympus Corp. said three executives helped conceal decades of losses by paying inflated fees to takeover advisers, the first admission of wrongdoing since accusations from its former chief executive officer engulfed the Japanese camera maker four weeks ago.

Olympus shares plunged by the daily limit and pulled other Japanese equities lower on concerns the country hasn’t escaped corporate governance weaknesses that have dogged it since the stock market bubble burst at the end of 1989. Allegations by Michael C. Woodford have wiped 70 percent from the value of the company’s stock since he was axed as CEO on Oct. 14

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Fees used to hide losses

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Japanese and U.S. regulators are probing allegations by former chief executive officer Michael C. Woodford that more than $1.5 billion was siphoned through offshore funds. That money may have been used to cancel out non-performing securities that Olympus was keeping off its books, according to a report in the Shukan Asahi magazine, which cited people familiar with the process.

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What the frick does this mean?

So they "hid losses" by "paying other people?" And that "canceled out" losses? And said losses they were "hiding" were already "off the books?" If they're off the books, then why would you be hiding any losses from them in the first place...they're not "on the books."

This is all I can come up with. They have these apparent off-balance sheet securities, which are also apparently underwater. At some point, they're put under pressure by someone (whoever that may be) to take these securities onto their balance sheet (for whatever reason). Maybe they were legally exposed to losses? In order to conceal these losses, they either straight up paid off someone to keep them "off the books," (again, whoever "they" might be in this case, or why they might be demanding such, which sounds like blackmail) or paid someone to somehow re-inflate the value of the securities by cycling the fees back into the securities, which were subsequently taken back onto the balance sheet at some minor loss at revaluation. No matter how you slice it, there's a massive fraud involved that is beyond any accounting chicanery that the link is implicating. Its a fraud story, not an accounting story.

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What the frick does this mean?

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Have to read through all this shite again tomorrow, it is f'n bizarre. Things like this, MF Global, all the fraudulent Chinese reverse mergers plus all the other uncovered bombs out there, makes one really question investing these days. How about the Dynergy sub creditor cram down today, I mean who do you really trust? Investing in international and/or emerging small cap ETFs, how many companies in them are legit?

Just read about the Dynegy thing. Although I seriously doubt that the "legal-engineering" that's going on there is going to stand up, its interesting nonetheless.

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It's one reason I like direct RE deals with current cashflow.

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That has worked well for me, but it still can be illiquid, which is why I don't really want to put more $ into it. Got offered what on paper looked like a very good deal two weeks ago, and when I ran the numbers and asked for the other party's statements verifying their cash contribution for the buildout it crumbled. That was the end of that, my trust has been worn to the bone the last 5-years.

LINK

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The $1 billion sale to Beckman of a unit Olympus spent four decades building helped the Japanese company bolster its finances, even as it booked writedowns on acquisitions to hide the impairments.

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Seriously wtf does that mean. They booked "writedowns" (which again are constantly referred to as "off balance sheet") to hide "impairments." Impairments, otherwise known as.....writedowns.

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During a hastily held press conference, Tatsuo Kainaka (pictured above), a former judge and chairman of the panel was repeatedly unable to account for who was paid to assist in the cover-up, how much they were paid, or where the billions of yen used to cover up the losses had gone. But he did insist that no money had gone to “anti-social forces” (??????), a term used by Japanese law enforcement and regulatory agencies to refer to any group of criminals, including Japan’s yakuza. Kainaka was nervous at the press conference, stumbling over accounting terminology and unable to recall when the former CEO of Olympus, Toshiro Shimoyama, had actually left the company and whether or not he was implicated in the financial fraud.

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Translation: it was definitely the yakuza.

LINK

...and investors have the gall to question the validity of Chinese companies' numbers. Well, those Japanese execs sure one-upped them for decades while maintaining market position. Crooks gonna be crooks....