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

quote:

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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.