Japanese camera maker Olympus today said that Tsuyoshi Kikukawa will resign as chairman and president immediately, in the wake of a scandal triggered by the sacking of the firm's British chief executive.
Kikukawa's resignation comes less than two weeks after he took control of the company following the ouster of former president and chief executive Michael Woodford.
Woodford contended that he was removed after querying the size of payments made by Olympus in deals between 2006 and 2008.
Kikukawa will become a director without executive rights, the company said in a statement. Director Shuichi Takayama will replace him as president.
"As we have troubled our customers, business partners and shareholders over a series of press reports and a slump in share prices, chairman and president Tsuyoshi Kikukawa today returned his titles as well as his right to representation," the Olympus statement said.
Olympus shares have plunged, losing about half their value since the ousting of Woodford on October 14, with the questioned payments falling under the media spotlight.
Among the deals queried by Woodford was the $1.92 billion acquisition of British medical-instruments company Gyrus Group and the $687m that Olympus has admitted it paid an adviser on the purchase.
Woodford commissioned a report on the deal from accounting firm PwC that queried why the fee was so high. It totalled more than a third of the company's purchase price, much larger than the 1-2% normally charged in acquisition deals.
Olympus yesterday declined to comment on media reports that the FBI was investigating the scandal involving the near $700m advisory fee payment. Woodford was dismissed only six months after being appointed president and two weeks after he was also named chief executive.
The 30-year company veteran, Olympus' first non-Japanese president and chief executive, said he was removed after he wrote to Kikukawa and urged him to resign over the payments, citing major governance concerns.
Woodford also queried Olympus' purchase of three Japanese companies unrelated to its core precision equipment businesses for hundreds of millions of dollars that it later wrote down.
Olympus has denied any wrongdoing and repeatedly blamed Woodford's demotion on "a big gap" between him and other directors on management and strategy, instead of his concerns over the deals.
