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legion wrote:...He just cost the shareholders a lot of money...
legion wrote:Woodford is starting to sound like a petulant child.
He just cost the shareholders a lot of money and he expects them to support him. As far as they are concerned Olympus was just riding out some bad investments. If they'd been smart like Barclays Bank they would have stored them in a war chest and used them for tax write offs, but they weren't that good at the game, settling for basic window dressing instead.
I hope he flies home economy class.
Coligny wrote:Youz sounds like if the only problem was the fact they got coughted...
Shareholders are not orphans deserving state protection...
They play a game, profit of the crime (olympus, tepco) and when they lose money, they fooking deserve it...
Yokohammer wrote:A Japanese company has been openly shamed by a foreigner. Therefore the foreigner is bad.
That, rather than the fact that the company had engaged in unethical and illegal business practices, is what will stick in the minds of many Japanese, and the spin machine will do its best to assure that's the way it goes.
Mulboyne wrote:I've seen a few people make this claim.
legion wrote:I'm not talking about rights and wrongs here I'm talking about perceptions, as far as the shareholders are concerned if he'd played along it would have all faded into the long and glorious history of dodgy accounting.
Mulboyne wrote:
The worst thing Woodford did was to force them to have an opinion when they aren't in a position to formulate one.
Mulboyne wrote:The shareholders don't hold it against Woodford that he lifted the covers on Olympus. Rather, they are embarrassed that they didn't know what was going on when it is their own fiduciary duty to monitor their investments: especially longstanding holdings.
legion wrote:Did Woodford contact the shareholders before he sent his letter to the chairman?
Excuse me for barging into the conversation, but it would appear to me that whether Mr. Woodford is culturally blind or not does not reduce the validity of his case. The facts are that a couple of generations of Olympus management purposely and systematically committed accounting fraud on a massive scale (i.e., the losses at one point would have torpedoed shareholder capital), and that Mr. Woodford was fired for "doing the right thing", i.e., fulfilling his legal and moral obligations as a senior officer of the company. While not a lawyer, it would also appear to me that he has a strong case for wrongful dismissal, be it in the U.K. or Japan.
Traditionally, i.e., in my experience, ever since the Lockheed bribery scandals in the 1970s, such embarrasments to the Japanese political establishment and regulators have been swept under the rug, usually with the key person (the keeper of the secrets) committing suicide and the ceremonial resignation of the top guy.
The debate among my colleagues and I regarding the Olympus scandal was whether or not the company would be delisted, as was Kanebo in 2003 and Livedoor in 2006, or remain listed, as was Nomura Securities in 1997 after a major organized crime scandal. The other issue was whether or not the senior executives central to the scandal would do jail time. Livedoor's Takafumi Horie and his colleague Ryoji Miyauchi were the only executives in my recollection to do actual jail time in my 40 years in Japan. In other cases, the executives received suspended jail sentences, or merely skated free by resigning. Our fear was that if the company were delisted, the gory details of the fraud would be swept under the rug again and forgotten....until the next scandal, as is the preference of regulators, main banks and the accounting firms involved.
Insisting that the entire board resign so that Olympus could start anew (as was the case with Nomura Securities around 1997), is also the better alternative from Japan's standpoint. Such corporate malfeasance, and the reaction of large domestic shareholders as well as regulators to it, is having a visible negative impact on the health of Japan's capital markets. The Livedoor scandal in 2006 was the trigger for a large exodus of individual investors and foreign investors from small cap stocks that the JASDAQ and Mothers markets in Japan have yet to recover from.
The points that Mr. Woodford makes about board responsibility and director independence reflect the views of the Asian Corporate Governance Association and other major non-Japanese institutional investors. Increasingly, these investors are coming around to the view that they need only invest in those listed Japanese companies that have global standard corporate governance.
10 years ago, it made no difference what foreign investors thought, but foreign ownership of Japanese equities now at 27% (the largest single owner group) and accounting for 60%~70% of TSE trading volume, and foreign investors are now key to the health of Japan's capital markets. On the other hand, domestic institutional investors, the so-called friendly shareholders that Japanese companies have depended upon, have become structural net sellers of Japanese equities, meaning that the once-over-easy-and-sweep-it-under-the-rug response to such cases in the interest of avoiding public embarrasment is becoming detrimental not only to Japan's international reputation, but to the health of its capital markets as well as its pension system and financial institutions.
Mulboyne wrote:I don't know the answer to that but I would doubt he did.
legion wrote:Easy to be wise in retrospect but perhaps he would have solved the issue more effectively if he'd sounded out his major shareholders first and worked out an objective, strategy and some tactics with them. He kind of reminds me of Gordon Brown announcing he was going to sell the UK's gold bullion and thus losing the advantage of surprise.
They could have probably engineered easing off the board members one by one, then making an announcement that they had found accounting "mistakes" and were rectifying them, coming out of it looking honest as a company as a whole.
Mike Oxlong wrote:Is it possible that, though he may not have been CEO material, he was brought in as a patsy, and managed to (perhaps inadventently) turn the tables on those who set him up to fail?
damn name wrote:Looking through the lens of the retrospectoscope, quietly going to the authorities through a proxy, while building an alliance of influential board members and major stockholders might have been a strategy that worked.
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