Eight individuals including former executives of Olympus Corp. have been ordered to pay a total of roughly 59 billion yen in damages to the company for covering up a massive amount of losses it suffered.
The Tokyo District Court held the eight defendants, including former Chairman Tsuyoshi Kikukawa, 76, responsible for their negligence in the incident, which came to light in 2011.
"If the former chairman and the others had not neglected their duties, the company would not have submitted false securities reports. Therefore, the defendants are obligated to compensate the company," Presiding Judge Akihiko Otake said.
The court ruled on April 27 on a lawsuit filed by Olympus and a shareholder demanding that 18 defendants compensate the company for damages the cover-up caused to the company. The defendants are 15 former board members and three heirs to a deceased former director.
Presiding Judge Otake pointed out that a total of about 58.7 billion yen was illicitly paid to shareholders as dividends based on asset securities reports containing false information on the firm's financial status.
Moreover, Otake recognized that six of the former board members, including the deceased one, caused losses to the company by dismissing the British president who confronted the company over allegations of its cover-up of losses, thereby damaging the public's trust in the firm.
The presiding judge accordingly ordered the five surviving former members and three heirs to the deceased one to compensate the company.
However, the presiding judge concluded that 10 other former board members were neither involved in nor aware of the cover-up.
"These defendants were not in a position to become suspicious (of the company's accounting practices). Therefore, it cannot be recognized that they neglected their duties, such as those to investigate any alleged illegal practices," Otake said.