Technology

Panasonic, Samsung to propose tie-up with Olympus, says report

February 01, 2012

Olympus shares have fallen by half since the company admitted to having used improper accounting tricks to conceal massive investment losses. — Reuters file picOlympus shares have fallen by half since the company admitted to having used improper accounting tricks to conceal massive investment losses. — Reuters file picTOKYO, Feb 1 — Japan’s Panasonic Corp and South Korea’s Samsung Electronics have each decided to propose capital ties with disgraced medical equipment maker Olympus Corp, the Mainichi newspaper reported today.

Other firms are already jostling to partner with Olympus, which has a 70 per cent share of the global market for diagnostic endoscopes. Fujifilm Holdings Corp has proposed an alliance while medical equipment maker Terumo Corp has said it wants to strengthen ties.

Electronics giant Sony Corp is also interested, sources have said.

Still another Japanese firm, which was not identified, is also soon set to make a proposal to Olympus, which is looking to shore up its finances after a US$1.7 billion (RM5.2 billion) accounting fraud severely depleted its net assets, the newspaper said.

A Panasonic spokesman said the company was checking the report and had no immediate comment. Samsung declined to comment.

Olympus is unlikely to respond quickly to any approaches. Olympus’s president has said any decision on alliances should be made by a new management team, due to chosen at a shareholders’ meeting in April.

The accounting scandal erupted after Olympus fired its British chief executive Michael Woodford on October 14, prompting him to blow the whistle on the firm’s dubious bookkeeping.

Since then, Olympus has admitted to having used improper accounting tricks to conceal massive investment losses, and is under investigation by law enforcement agencies in Japan, Britain and the United States.

Olympus shares have fallen by half since the scandal surfaced, leaving it with a market capitalisation of just US$4.5 billion.

However, the company is being supported by major Japanese shareholders, who prefer bringing in an equity partner rather than selling the whole company or its assets. — Reuters