Woodford to sue Olympus, drops leadership bid

Written by Reuters | Tokyo | Updated: Jan 7 2012, 09:03am hrs
The ousted British CEO of disgraced Olympus, who blew the whistle on a $1.7-billion accounting fraud, dropped his bid to return to lead the medical device maker, saying the saga had taken its toll on his family. Michael Woodfords campaign against its management rocked the maker of endoscopes and cameras, but failed to win over Japanese institutional shareholders including Olympus main lenders, who support a board that has been castigated for insufficient oversight.

However, the Japanese institutional shareholders have not spoken one single word of criticism, in complete and utter contrast with the overseas shareholders who were demanding accountability, Woodford said.

The decision by Woodford leaves foreign shareholders who want a new slate of directors, including US fund manager Southeastern Asset Management, without a champion to lead any proxy battle when the company convenes an extraordinary shareholders meeting as early as March.

Woodford said he would sue Olympus for unfair dismissal and had instructed his lawyers to begin legal action in Britain. Olympus said in October it fired Woodford because he failed to understand the companys management style and Japanese culture.

There are no grounds whatsoever for dismissal, he said.

Woodford called his sacking and later developments an Alice in Wonderland situation. I get fired ... for doing the right thing, and they (current management) are still there, he said.

Woodford, who fled to England after his sacking citing unspecified safety concerns, said the trauma suffered by his wife after he went public with his campaign played a major part in his decision to drop his bid. Its been a frightening period for my wife. I cannot put her through any more anguish, he said.