Hajime Sagawa and Akio Nakagawa, two Japanese bankers, are at the center of what the New York Times calls “a growing firestorm over a mysterious $687 million payout by Olympus, the Japanese company that runs a lucrative medical equipment business and a less successful, if better known, digital camera business.”
Olympus Mystery Fee
The New York Times reports “the money has been described as a fee for advising Olympus on the 2008 takeover of a British company, the Gyrus Group….But the fee amount was more than 30 times the norm on Wall Street.” After the transaction, part of the fee went to a small firm owned by Hajime Sagawa and Akio Nakagawa according to the public records. The rest of the fee went to a Cayman Islands company that has “ties to at least one of the men.” Both firms closed as soon as the fees were paid.
Questions at Olympus
The FBI is reportedly investigating the large fee. Yoshiaki Yamada, a spokesman for Olympus in Tokyo, said “We are not aware of any investigation.” However, shareholders and analysts are demanding answers. While Olympus has said, “its payments were appropriate,” it announced Friday that it would set up a panel to examine past payments. Olympus is also facing accusations that it fired CEO Michael C. Woodford because he planned to expose the fees. The New York Times reports, “Many analysts have suspended their outlook for Olympus, saying the company’s future had been thrown into disarray by the seriousness of the matter.”