Olympus Loses Bid to Revoke Ex-CEO's $84 Million Pension
(Bloomberg) -- Olympus Corp. lost a U.K. lawsuit that tried to block the pension of former head Michael Woodford after he blew the whistle on an alleged $1.7 billion accounting fraud and 13-year cover-up at the firm.
The Olympus division Keymed Ltd. brought the suit against Woodford and his former colleague Paul Hillman in a London court. Keymed alleged that the former executives conspired to boost their pensions and hide the plan from the board, according to a court filing. Woodford’s pension was calculated to be about 65 million pounds ($85 million), according to a filing by Keymed.
Keymed’s losses from the executives’ arrangement were almost 57 million pounds, Keymed said in court papers in 2016.
Judge Marcus Smith wrote that there wasn’t evidence of dishonest or improper conduct by the defendants. While the pair made some mistakes, Smith said they were merely instances of busy people in a busy company making errors.
In the judgment, Smith praised Woodford, describing him as a “forceful and articulate witness,” who was “obviously a powerful and decisive businessman.” Keymed benefited from Woodford’s ruthlessness and determination, qualities that the ex-CEO also used to help himself, the judge wrote. And there is nothing wrong with that, the judge found.
“We had a duty to our stakeholders to investigate the circumstances in which such a large entitlement had arisen,” a Keymed spokeswoman said in an emailed statement. “We are disappointed by the outcome of the proceedings and are considering the legal options available to us.”
Woodford said in an email that he is delighted the judge dismissed the charges and that he and his colleague feel completely vindicated.
Olympus fired Woodford in 2011 after he blew the whistle on the alleged accounting fraud, which he discovered two weeks after taking over as CEO. Woodford referred the case to the U.K.’s Serious Fraud Office, which charged the company with making false and misleading statements to auditors between 2010 and 2011. The charges were later dropped as the anti-fraud agency said it couldn’t prosecute people in Japan who wouldn’t be extradited.
The case is Keymed (Medical & Industrial Equipment) Ltd v. Hillman, HC-2015-003797, U.K. High Court of Justice, Chancery Division (London).
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