Olympus Probe Finds 'Rotten' Executives Created Elaborate Scheme To Hide $1.5B Of Losses

TOKYO — A panel probing an accounting scandal at Japan's Olympus Corp. said Tuesday an elaborate scheme to cover up $1.5 billion of investment losses was orchestrated by a group of top executives who were "rotten to the core."

The panel also credited the company's ex-CEO, Michael Woodford, for bringing the deception at the camera and medical equipment maker to light. Woodford, a Briton, was fired in October after questioning the dubious transactions that have become one of Japan's biggest corporate fiascos.

Led by former Supreme Court judge Tatsuo Kainaka, the third-party panel found that as of 2003, Olympus had racked up 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s.

"The management was rotten to the core and contaminated what was around it, creating in the worst sense a group mentality of the typical salarymen," the report said in a reference to Japan's culture of corporate loyalty.    More