Yakuza Crackdown Could Derail Effort to Keep Olympus Listed

Any proof that crime syndicate members or persons close to them were involved in the accounting scandal, however, would make it difficult for the TSE to maintain Olympus on the bourse. “If there are clear links from Olympus to organised crime in Japan, then that would weaken the case for the company to remain listed and would greatly increase the pressure on the TSE to delist,” Jamie Allen, secretary general of the corporate governance association, told Reuters in an email.

“However, as far as we know, this is still speculation.” Delisting would effectively cut Olympus off from equity capital markets, constraining its funding and making it harder for its lenders to keep supporting the firm in its battle to avoid having to sell off its profitable core businesses.

It could also damage Japan’s reputation among global investors. If Olympus is delisted, prospective bidders may swoop.

Its main rivals in the endoscope business, fellow Japanese firms Fujifilm and Hoya, are watching events closely, and private equity firms could also be interested. Camera-maker Canon Inc, which is keen to expand its healthcare presence, may also want to cherry-pick some of Olympus’ assets, according to industry analysts.

Japanese authorities have been lamenting moves by organised crime into financial markets and corporate boardrooms for more than two decades, as yakuza branched out into legitimate ventures with which reputable firms then do business. An ordinance that went into effect on Oct. 1 in Tokyo — the last in a series of local ordinances nation-wide — cracks down not only on organised crime syndicates but also firms that knowingly do business with gangsters or those close to them.

“They (police) are looking to make a bit of a splash. The whole organized crime thing seems to be on the agenda and they won’t want to be seen ignoring it,” said Peter Godwin, managing partner at law firm Herbert Smith in Tokyo.