Olympus Corporation

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Olympus Corporation
オリンパス株式会社
Type Public
Traded as TYO: 7733, OTC Pink: OCPNY
Industry Electronics
Founded 12 October 1919
Founder(s) Takeshi Yamashita[1]
Headquarters Shinjuku, Tokyo, Japan
Key people Hiroyuki Sasa President/CEO
Products Precision machineries and instruments, Cameras, Voice recorders, Medical endoscopes and other medical devices, face cream and tupperware-like plastic table ware
Revenue Increase ¥847,105 million (y/e March 2011)[2]
Employees 39,727 (@31 Mar. 2011)[2]
Website Olympus Global

Olympus Corporation (オリンパス株式会社 Orinpasu Kabushiki-gaisha) is a Japan-based manufacturer of optics and reprography products. Olympus was established on 12 October 1919, initially specializing in microscope and thermometer businesses.[3] Olympus enjoys a majority share of the world market in gastro-intestinal endoscopes. It has a roughly 70% share of the global market whose estimated value is US$2.5 billion. Its global headquarters are in Shinjuku, Tokyo, Japan.

In late 2011, the company fired its newly appointed British president, precipitating a scandal that wiped 75% off the company's stock market valuation and resulted in the arrest of 11 Olympus directors and senior managers for alleged criminal activities. All were Japanese. The board's dismissal of its British president arose from his unwelcome formal notification about dubious company activities and he was not tainted by the scandal that he had brought to the board's attention. The Olympus scandal was one of the biggest and most durable loss-concealing scams in the history of corporate Japan.[4]

In June 2012, Olympus announced it will cut 2,700 jobs,[5] or 7 percent of its global work force, by the end of March 2014 and will scrap around 40 percent of its 30 manufacturing plants around the world by the end of March 2015 to reduce cost due to investment losses of 117.7 billion Yen ($1.5 billion) dating back to the 1990s.[6]

Products


Cameras & audio

In 1936, Olympus introduced its first camera, the Semi-Olympus I. The first innovative camera series from Olympus was the Pen, launched in 1959. The half-frame format, allowing 72 pictures of 18 × 24mm format on a standard 36 exposure roll of film, made Pen cameras compact and portable for their time.

Olympus OM Lenses

The Pen system design team, led by Yoshihisa Maitani, later created the OM system, a full-frame professional 35mm SLR system designed to compete with Nikon and Canon's bestsellers. The OM system introduced a new trend towards more compact cameras and lenses, being much smaller than its competitors and presenting innovative design features such as off-the-film (OTF) metering and OTF flash automation. Eventually the system included 14 different bodies, approximately 60 Zuiko-branded lenses, and numerous camera accessories.

Olympus Quick Flash camera

In 1983, Olympus, along with Canon, branded a range of video recording equipment manufactured by JVC[citation needed], and called it "Olympus Video Photography", even employing renowned photographer Terance Donovan to promote the range[citation needed]. A second version of the system was available the year after, but this was Olympus' last foray into the world of consumer video equipment until digital cameras became popular[citation needed].

Tsuyoshi Kikukawa, who was later to become President of Olympus, foresaw the demand for the digital SLR, and is credited with the company's strategy in digital photography. He fought for commitment by Olympus to enter the market in high-resolution photographic products. As a result of his efforts, Olympus released an 810,000-pixel digital camera for the mass market in 1996, when the resolution of rivals' offerings were less than half.[7] The very next year, Olympus hit the market with a 1.41 million pixel camera. By 2001, the company's annual turnover from digital photography was in excess of ¥100 billion.[7] Olympus manufactures compact digital cameras and is the designer of the Four-Thirds System standard for digital single-lens reflex cameras. Olympus' Four Thirds system flagship DSLR camera is the E-5 released in 2010. Olympus is also the largest manufacturer of Four-Thirds lenses, under the Zuiko brand.

At one time Olympus cameras used only the proprietary xD-Picture Card for storage media. This storage solution is less popular than more common formats, and recent cameras can use SD and CompactFlash cards. The most recent development is Olympus' focus on the Micro Four Thirds system.

Olympus first introduced the Microcassette. The Olympus Pearlcorder L400, released in the 1980s, was the smallest and lightest Microcassette Voice recorder ever offered for sale, 2.9 (L) × 0.8 (H) × 2.0 in. (W) / 73 (L) × 20 (H) × 52 (W) 3.2 oz (91 g).[8]

In 2012, the company announced that Sony and Fujifilm had offered forming a capital alliance and the company would focus on Mirrorless interchangeable-lens cameras (MILC).[9]

Medical and surgical

Olympus manufactures endoscopic, ultrasound, electrocautery, endotherapy and cleaning & disinfection equipment. The first flexible Endoscope in the world was co-developed and manufactured by Olympus in Tokyo.[10] Through its comprehensive product range and its reactivity to market innovations, Olympus enjoys a virtual stranglehold of the world market in gastro-intestinal endoscopes. Its has roughly 70% share of the global market whose estimated valued at US$2.5 billion.[11] On September 28, 2012, Olympus and Sony announced that the two companies will establish a joint venture to develop new surgical endoscopes with 4K resolution (or higher) and 3D capability.[12]

Scientific

Since the beginning, the company has also been a manufacturer of microscopes and optics for specialised needs, such as medical use. The first microscope manufactured at Olympus was called the Asahi.[13] Currently, Olympus is a worldwide renowned manufacturer of microscopes. Olympus offers a complete range of microscopes, which covers applications from education and routine studies up to state of the art research imaging systems both in life science and materials science.

Industrial

Olympus manufactures and sells industrial scanners, flaw detectors, probes and transducers, thickness gages, digital cameras, image analysis software, industrial videoscopes, fiberscopes, light sources, XRF and XRD analyzers, and high-speed video cameras.

Name and logo

  • 1919: The company was founded as Takachiho Seisakusho. In Japanese mythology, deities live on Takamagahara, the peak of Mt. Takachiho. The first corporate logo was TOKIWA, derived from Tokiwa Shokai, the company that the founder, Takeshi Yamashita, had worked for. Tokiwa Shokai held an equity stake in Takachiho Seisakusho and was responsible for marketing Takachiho products. The logo reads "TOKIWA TOKYO". The "G" and "M" marks above are believed to be the initials of Goro Matsukata, the president of Tokiwa Shokai.
  • 1921: The Olympus brand was introduced in February 1921. This logo was used for microscopes and other products. Brochures and newspaper ads for cameras also used this logo. The OLYMPUS TOKYO logo is still in use today. There was a period in which OIC was used instead of TOKYO in the logo. OIC stood for Optical Industrial Company, which was a translation of Olympus' Japanese corporate name at that time. This logo was used for the GT-I and GT-II endoscopes, among others.
  • 1942: The company was renamed to Takachiho Optical Co., Ltd., when optical products became the mainstay of the company.
  • 1949: The name changed to Olympus Optical Co., Ltd. It was named after Mount Olympus, which like Mt. Takachiho is the home of gods, this time of Greek mythology. In the words of the company, they chose the name to "reflect its strong aspiration to create high-quality, world-famous products".
  • 1970: The new logo was designed to give impressions of quality and sophistication.
  • 2001: The yellow line underneath the new logo is called the "Opto-Digital Pattern" and it represents light and boundless possibilities of digital technology. It symbolizes dynamic and innovative nature of Opto-Digital Technology and Olympus Corporation. This logo is called the Communication Symbol of Olympus and it represents Olympus' brand image.
  • 2003: Renamed Olympus Corporation.

Corporate affairs

Ownership

Shareholding in Olympus is dispersed, and the company's key institutional investors are largely passive.[14] As of 31 March 2011, investors include Nippon Life Insurance (8.4%), Bank of Tokyo-Mitsubishi (4.98%), and Sumitomo Mitsui Banking (3.13%), and the Government of Singapore Investment Corporation (2.55%). Foreign institutions and individuals speak for 27.71% of Olympus shares.[14][15] On September 28, 2012, Olympus and Sony announced that Olympus will receive a 50 billion yen capital injection from Sony. On February 22, 2013, Sony became the largest shareholder (11.46%) of Olympus.

Governance

According to its 2011 Annual Report, Olympus was governed by a 15-person board of directors, with Tsuyoshi Kikukawa its President and CEO, and Michael C. Woodford as President and chief operating officer. Mr Kikukawa resigned in the following year and was arrested by Tokyo police for alleged criminal offenses during and before his term as president and CEO. The corporation in 2011 had three "outside directors".[16] It has a four-member 'Board of Auditors' which supervises and audits directors' performance. The company's executive committee consists of 28 members, responsible for the day-to-day operations.[17]

2011 accounting scandal

Main article: Olympus scandal

On 1 April 2011, Michael Woodford, 51, was named president and chief operating officer – the first ever foreigner to hold the position – replacing Kikukawa, who became chairman. Woodford, an Olympus veteran of 30-years, was previously Executive Managing Director of Olympus Medical Systems Europa. Olympus appointed Woodford its CEO six months later, but the board suddenly removed him as chief executive two weeks into the job, while allowing him to retain his board seat.[18]

Woodford alleged that his removal was linked to several prior acquisitions he questioned, particularly the US$2.2 billion deal in 2008 to acquire British medical equipment maker Gyrus Group. Thomson Reuters reported that US$687 million was paid to a middle-man as a success fee – a sum equal to 31% of the purchase price, and which ranks as the highest ever M&A fee.[18] According to the Daily Telegraph, some of the sums paid out relating to the acquisition of a technology company ITX were also under examination.[19] Woodford noted that an article in Japanese financial magazine Facta in July prompted his suspicion of the transactions.[14] Reports also said the company acquired three other Japanese companies outside its core business, and recognised that the assets were worth US$721 million less than their acquisition value 12 months previously.[20]

Shareholders expressed concern after Olympus' share price nearly halved in value following the Woodford revelations, and asked for "prompt action".[18][21] Following his dismissal, Woodford passed on information to the British Serious Fraud Office, and requested police protection. He said the payments may have been linked to "forces behind" the Olympus board.[21] Japanese newspaper Sankei suggest that a total of $1.5bn in acquisition-related advisory payments could be linked to the Yakuza.[19]

The company responded on 19 October that "major differences had arisen between Mr. Woodford and other management regarding the direction and conduct of the company’s business". On the Gyrus acquisition, it also declared the Audit Board's view that "no dishonesty or illegality is found in the transaction itself, nor any breach of obligation to good management or any systematic errors by the directors recognised."[18] On 26 October, the company announced that in order to assuage shareholders' concerns, Kikukawa resigned as chairman; he was replaced by Shuichi Takayama. Olympus shares rebounded 23 percent.[20][22]

On 8 November 2011, the company admitted that the money had been used to cover losses on investments dating to the 1990s[23] and that company's accounting practice was "not appropriate", thus coming clean on "one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history", according to the Wall Street Journal. The company laid the blame for the inappropriate accounting on ex-president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive VP Hisashi Mori.[4]

On 21 December 2011, Japanese authorities, including the Tokyo prosecutor's office, the Tokyo Metropolitan Police and the Japanese Securities and Exchange Surveillance Commission, raided the company's offices in Tokyo.[24]

In February 2012, Seven Olympus executives were arrested by Japanese police and prosecutors. Ex-president Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former auditor Hideo Yamada were taken into custody on suspicion of violating the Financial Instruments and Exchange Law, along with former bankers Akio Nakagawa and Nobumasa Yokoo and two others, suspected of having helped the board hide significant losses.[25]

On 25 September 2012, the company and Kikukawa, Yamada, and Mori pleaded guilty to collusion to submit false financial reports.[26]

See also

References

  1. ↑ "Olympus History: Origin of Our Name". Retrieved 16 January 2007. 
  2. ↑ 2.0 2.1 Outline. Olympus Corp. Archived from the original on 16 Nov. 2011. Retrieved 16 Nov. 2011
  3. ↑ "History of Olympus: Founding". Retrieved 16 January 2007. 
  4. ↑ 4.0 4.1 "Olympus President: Will Do Utmost To Avoid Delisting". The Wall Street Journal. 7 November 2011. Retrieved 8 November 2011. 
  5. ↑ "Olympus to Cut 2,700 Jobs, Consider Alliances to Boost Capital". 8 June 2012. 
  6. ↑ "Olympus whistleblower wins millions in settlement". June 8, 2012. 
  7. ↑ 7.0 7.1 "Dismissed CEO Turns Focus on Troubles at Olympus", Nikkei Business. 31 Oct. 2011. Archived from the original on 25 Nov. 2011. Retrieved 25 Nov. 2011
  8. ↑ Thomas, Ralph D. (2006). "Ultra Compact Pearlcorder L400 Micro, 1980s". Thomas Investigative Publications, Inc. Retrieved 3 March 2007. 
  9. ↑ "Olympus plans to cut its camera line-up". Retrieved May 6, 2012. 
  10. ↑ "OLYMPUS | Olympus History: VOL. 2 Birth of Gastrocameras". Olympus-global.com. Retrieved 8 November 2011. 
  11. ↑ "Japanese Doctors Flustered and Angry Following Olympus Scandal". 16 November 2011. Medtech Insider. Archived from the original on 28 Nov. 2011. Retrieved 28 Nov. 2011
  12. ↑ Announcement of Agreements Between Olympus and Sony to Form Business and Capital Alliance
  13. ↑ "Olympus History: The Asahi Microscope". Olympus Corporation. Archived from the original on 27 December 2006. Retrieved 21 February 2007. 
  14. ↑ 14.0 14.1 14.2 Bacani, Cesar (24 October 2011) "The Olympus Scandal: When a Foreign CEO Rebels" (pg 3). CFO Innovation Asia. Retrieved 24 October 2011
  15. ↑ "Investor information (as of 31 March 2011". Olympus Corp. Retrieved 24 October 2011
  16. ↑ "Board of Directors, Corporate Auditors and Executive Officers (as of 29 June 2011)". Olympus Corp. Retrieved 24 October 2011
  17. ↑ "Corporate Governance". Olympus Corp. Retrieved 24 October 2011
  18. ↑ 18.0 18.1 18.2 18.3 Bacani, Cesar (24 October 2011) "The Olympus Scandal: When a Foreign CEO Rebels" (pg 1). CFO Innovation Asia. Retrieved 24 October 2011
  19. ↑ 19.0 19.1 Russell, Jonathan (23 Oct 2011). "Huge Olympus fees have 'underworld links'". Daily Telegraph. retrieved 24 October 2011.
  20. ↑ 20.0 20.1 Yasu, Mariko (27 October 2011). "Olympus's Kikukawa Quits as Axed Woodford Takes Case to FBI", BusinessWeek. Retrieved 27 October 2011
  21. ↑ 21.0 21.1 Russell, Jonathan (21 Oct 2011). "Olympus launches investigation into M&A fees". Daily Telegraph. retrieved 24 October 2011.
  22. ↑ Cheesman, Chris (26 October 2011). "Olympus chairman quit over 'widespread concerns'" Amateur Photographer. Retrieved 27 October 2011
  23. ↑ Soble, Jonathan (29 September 2011). "Olympus used takeover fees to hide losses". Financial Times. Retrieved 8 November 2011. 
  24. ↑ "Japanese authorities raid Olympus offices". CNN. 21 December 2011. Retrieved 24 December 2011. 
  25. ↑ Reuters (15 February 2012). "Former executives, bankers arrested over Olympus fraud". Reuters. 
  26. ↑ Kyodo News, "Ex-Olympus execs plead guilty to hiding losses", Japan Times, 26 September 2012, p. 1

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