17 Feb 2012

Olympus chief arrested in Japan

6:07 am on 17 February 2012

Police in Japan have arrested the former president of the camera maker Olympus for questioning about his role in one of the country's biggest financial scandals.

Tsuyoshi Kikukawa is suspected of being part of a long running cover up of losses at Olympus amounting to $US1.7 billion.

The police are also investigating other former Olympus executives.

Olympus has also sued 19 former and current executives over the issue.

The scandal broke out in October 2011 after former chief executive Michael Woodford claimed he was fired for raising concerns about the company's accounting practices.

Mr Woodford pointed out that he had questioned Olympus' payment of US$687m in fees to financial advisers during the acquisition of UK medical equipment company Gyrus.

Although the company initially denied the allegations, it later admitted that it had been hiding losses for as long as 20 years.