Three businessmen arrested over Olympus scandal

PHOTO: Three businessmen arrested over Olympus scandal

TOKYO - Japanese prosecutors said Tuesday they have arrested three businessmen on suspicion of illegally receiving money from Olympus in return for helping it cover up massive losses.

The Tokyo Prosecutors' Office arrested Nobumasa Yokoo, 59, Taku Hada, 50, and Hisashi Ono, 51, on suspicion of violating the financial instruments transaction law.

The three are suspected of illegally concealing 2.2 billion yen (S$27 million) in consultant fees given by Olympus in 2008 as they instructed the disgraced camera and medical equipment maker on how to cover up a US$1.7 billion loss.

The three have already been indicted for falsifying financial results in 2007 and 2008 in conspiracy with Olympus executives over the scandal.

Prosecutors in March sought a five-year jail term for the former head of Olympus for his involvement in the cover-up that tarnished Japan's corporate governance image.

They also asked the Tokyo District Court to slap a one-billion-yen fine on Olympus, whose top executives for years hid losses stemming from bad investments.

The Tokyo District Court is scheduled to hand down a verdict next month.

The case was brought to light in 2011 by Michael Woodford, the firm's first foreign leader, who initially questioned executives about past acquisitions and outsized consultant fees.