Yakuza cast shadow over Olympus affair

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SummaryAs one of Japan’s biggest corporate dramas in years, the furore surrounding optical equipment maker Olympus already boasts a rich cast of characters including a disgraced chairman, the British president he fired and a hapless successor struggling to clean up the mess.

By Mure Dickie in Tokyo

As one of Japan’s biggest corporate dramas in years, the furore surrounding optical equipment maker Olympus already boasts a rich cast of characters including a disgraced chairman, the British president he fired and a hapless successor struggling to clean up the mess.

But some observers wonder whether shadier players - Japan’s notorious yakuza crime syndicates - may also have a role in the scandal.

“The Olympus case appears to bear all the hallmarks of the sort of financial frauds in which organised crime groups have been involved in the past,” says Velisarios Kattoulas of Poseidon Research, which advises multinationals on doing business in Japan and other Asian nations.

Mr Kattoulas says people his firm has spoken to on the fringes of organised crime are concerned whether one of Japan’s most powerful yakuza groups was involved.

Facta - the Japanese magazine that uncovered the more than $1bn in suspect payments connected with the acquisitions - in October highlighted possible involvement in the scandal of a company suspected of having a relationship with “antisocial forces”, a euphemism used in Japan for the yakuza.

Olympus’s new president, Shuichi Takayama, has waved aside such suggestions, although he has been forced to reverse earlier denials and admit that former chairman Tsuyoshi Kikukawa and other executives used a string of corporate acquisitions to cover up hidden losses dating from the 1990s.

Asked by journalists on October 26th about the possibility of involvement by “antisocial forces” in the scandal, Mr Takayama said, “I absolutely do not recognise this”.

In an article on the scandal this month, the online magazine Gendai Business argued that speculation that yakuza had a central role was premature. “Even if there are strange transactions, it does not look as if strange forces were directly involved,” the magazine said.

No evidence of yakuza involvement has so far come to light, but the very possibility was enough to give Michael Woodford, the British Olympus president who was fired after asking questions about the transactions, “cold and clammy” hands.

Nor are such fears ridiculous. Nobody doubts that the yakuza, which claim roots in traditional associations of gamblers and peddlers, remain a force in Japanese society. Police have designated 22 syndicates as boryokudan - “violent groups” - with nearly 80,000 members and associates.

Police also say the yakuza have been stepping up efforts to expand beyond sectors such as gambling, prostitution, drug dealing and protection rackets into legitimate businesses including finance and securities

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