Olympus settles unfair dismissal case with ex-CEO

May 30, 2012 7:35 AM
Avoids fraud questions.

Michael Woodford, the ousted chief executive and whistleblower of Japanese camera maker Olympus, has reached an out-of-court settlement with his former employer over alleged unfair dismissal.

Woodford had claimed he was dismissed from the company after uncovering one of Japan's biggest corporate frauds.

The deal on Tuesday came after a delay to a London hearing that was set to throw an unwanted spotlight back on an $1.7 billion accounting fraud that cost the company its board and reputation.

The terms of the settlement were not immediately disclosed but the payout was expected to run into the millions of pounds.

According to reports, Woodford was seeking compensation of up to US$60 million (AU$61 million), or ten years' lost earnings at a chief executive level after he was sacked, ejected from his apartment and told to take the bus to the airport after just six months in the top job.

Legal experts said the highest UK award to date has been around 3.8 million pounds (AU$6.03 million).

Woodford was unanimously dismissed by the Olympus board last October after persistently demanding answers from top executives about a string of obscure and hefty payments linked to acquisitions.

Olympus said Woodford was sacked because the 30-year company veteran failed to understand its management style and Japanese culture. But over the following weeks, regulators uncovered an accounting fraud stretching back over more than a decade.

Woodford has already published a book in Japanese about his experiences at the company, and plans another in English around October this year.

By bringing a claim on the grounds of whistleblowing and discrimination in the employment tribunal, Woodford's damages were unlimited, depending on whether he is likely ever to regain a career at global CEO level again.

It was expected a settlement would occur after the hearing, scheduled to occur this week, was briefly delayed on Monday, giving legal teams for Woodford and Olympus more time to put the finishing touches to their cases.

Woodford had entered the hearing armed with a damning and high-level independent panel report slating "rotten" Olympus bosses, as well as a report from auditor PricewaterhouseCoopers. His case was also bolstered by a string of arrests globally surrounding corporate fraud at the company.

The settlement is subject to approval by Olympus' board when it meets on June 8. Should the board refuse settlement, the employment case will be reopened.

Woodford had said he also planned a defamation suit in the UK High Court.

(Reporting by Kirstin Ridley; Writing by Simon Meads; Editing by Jon Loades-Carter)