Japanese premier expresses concern over Olympus scam

Japanese prime minister Yoshihiko Noda has admitted that the scandal relating to controversial payments made by camera-maker Olympus could tarnish his country's image.

''What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that does not follow the rules of capitalism,'' Noda told the Financial Times. ''Japanese society is not that kind of society.''

The fact that the Japanese premier commented on ethical issues being faced by a private company reflects the widespread concern in the country about the growing scandals that have rocked corporate Japan in recent years.

Tsuyoshi Kikukawa, the former chairman of Olympus, was forced to quit last week, days after he sacked Michael Woodford, his British president and chief executive, over irregular payments amounting to a whopping $1 billion made by the firm to little-known financial advisers and investment funds for arranging M&A deals.

Noda told the London-based paper that he expected Olympus ''to fully clarify the facts and act on them appropriately.''

The scandal pertains to payments made by the camera-maker to advisers who helped it acquire a British medical equipment firm, Gyrus, in 2008 for $2.2 billion. Olympus paid two unknown firms – Axes America, New York, and Axam Investment, Cayman Island - an eye-popping $686 million for the deal. (See: Japanese camera maker Olympus forced to probe high M&A advisory payments).