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Former Olympus chairman gets sentence for $1.7 billion fraud

Staff writer |
Olympus Corp's former chairman Tsuyoshi Kikukawa received three years jail time suspended for five years for his involvement in the 1.7 billion dollar accounting fraud.

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This is the biggest case of corporate fraud in Japanese history. Executive Vice President Hisashi Mori and former auditing officer Hideo Yamada also received suspended sentences for their respective roles in the financial cover-up.

Olympus's shares plunged 80% because of the scandal and the company was ordered to pay fines amounting to 7$ million by Tokyo District Judge Hiroaki Saito. The decision came two years after whistle-blower Michael Woodford revealed that the company submitted falsified financial reports to hide their investment losses for the past 13 years.

Mr. Woodford, the first foreign head at Olympus, was terminated after he started investigating the suspicious practices he observed in the company. The executives admitted to the fraud and pleaded guilty in front of a judge last September.

Olympus eventually settled with Woodford and paid him $15.6 million as compensation for his wrongful termination. They were also fined 2.4 million dollars by Japan's financial regulators.

Olympus is still facing several lawsuits from investors, including State Street Bank and Trust & Co. and Government of Singapore Investment Corporation Pte Ltd. They are seeking $190 billion in damages in their joint complaint.