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Finance GreenWatch » unclassified » Olympus to brief creditor banks on loss coverup(Japan Times)

Olympus to brief creditor banks on loss coverup(Japan Times)

Olympus Corp. will brief its creditor banks and other financial institutions Wednesday about the maker’s coverup of past securities investment losses, according to the banks.

The banks, which include Mizuho Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., said Monday they plan to study what steps to take in the future based on the briefing as well as the outcome of the probe by a third-party panel set up by the company.

Mizuho Bank, which has credited loans of tens of billions of yen to Olympus, has lowered its assessment of the loans from “normal,” according to Mizuho Financial Group President Yasuhiro Sato.

Koichi Miyata, president of SMFG, which has Olympus’s main creditor bank, Sumitomo Mitsui Banking Corp., under its umbrella, told a news conference: “It is true that we could not detect (the coverup.) It is very regrettable.”

In addition to downgrading of its corporate value, Olympus is exposed to the possibility of being delisted from the Tokyo Stock Exchange unless it presents financial results to the Finance Ministry by Dec. 14 as stipulated by law.

Olympus admitted last week it used funds for past acquisitions to hide latent losses on securities investments since around the 1990s.

As news outlets continue to cover the scandal, sales of Olympus products, including digital cameras and mainstay gastrointestinal endoscopes, which account for about 70 percent of the global market share, risk being affected.

According to research firm BCN, Olympus had a leading share of 34.8 percent in the mirrorless interchangeable lens camera market last month in Japan, followed by Sony Corp. with a 28.7 percent share and Panasonic Corp. with a 26.1 percent share.

Among the products, the Pen Lite E-PL3 camera launched in September has “a good reputation among customers” for its compact size while being capable of continuously shooting 5.5 frames per second, according to a major retailer.

Though Olympus had an opportunity to outdistance rivals such as Sony, whose digital camera plant in Thailand was affected by floods, its consumer sales could be hit by the scandal, analysts said.

BCN analyst Ichiro Michikoshi cited the possibility that consumers may be concerned about backup services and refrain from buying Olympus-brand products if the existence of the firm is threatened.

Meanwhile, Olympus shares snapped a 10-day losing streak Monday and rose by the daily limit of ¥80 to ¥540, 17.4 percent higher, on speculation that the firm will stay listed.

Over the weekend, some media sources reported that the Securities and Exchange Surveillance Commission is considering forgoing filing a criminal complaint against the company and may recommend that a levy be imposed instead for the company’s false financial reports, if Olympus corrects past earnings reports.


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