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Japanese camera firm Olympus will be prosecuted by the UK's Serious Fraud Office along with its British subsidiary Gyrus Group following a £1bn accounting scandal at the company. The SFO has been investigating both companies after three of Olympus' former execs admitted to falsifying financial statements, overstating net assets …

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More information...

I would recommend Mark Woodford's book on the issue.

A sad indictment of the Japanese business culture and the fact the individuals involved got nothing more than a slap on the wrist just goes to show that problems go all the way up to the top in Japanese society

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Anonymous Coward

Re: More information...

No different to the UK then (Vodafone, Goldman Sachs etc, etc)

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Anonymous Coward

Re: More information...

One case does not condemn an entire society.

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Re: More information...

What about HSBC's slap on the wrists for laundering $70 trillion of cash for Mexican drug cartels?

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Anonymous Coward

And the reason they know there's been an accounting fraud is .....Because they've been reading the news.

In a comedy universe, you wouldn't have to make this stuff up.

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Pint

the Serious Fraud Office

is next door to the Trivial Fraud Office... which incidentally is currently investigating my claim that I (in a past life, obviously!) took the final wicket in the 1882 England v Australia test match at the Oval.

PS: To any English cricket supporters, congratulations. Your boys were better, played better, and earned a well deserved victory. A beer for you.

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Unhappy

Interesting in Japan they committed fraud to cover *lossess*

Not (apparently) to line the Directors pockets.

I'm pretty sure that would never happen with a British company.

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Re: Interesting in Japan they committed fraud to cover *lossess*

Does Polly Peck or BCCI count as British companies?

Enron, MCI, Stamford International Bank, Bernie Madoff and many others obviously aren't Brittish, but actually most fraud is committed to cover losses.

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Happy

Re: Interesting in Japan they committed fraud to cover *lossess*

"most fraud is committed to cover losses" or hide profit.

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FAIL

Re: Interesting in Japan they committed fraud to cover *lossess*

You have heard of share options right?

Heres a hint -> Cover up losses (report inflated profits) -> maintain / increase share price -> Options Vest -> profit.

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Re: Interesting in Japan they committed fraud to cover *lossess*

""most fraud is committed to cover losses" or hide profit."

Most serious "report & accounts" level fraud for listed comapnies is committed to hide a failure to meet expectations. Sometimes that's losses, but usually it is that profits have been made, but are below market expectations. I worked at director minus one level for a company that went down due to accounting fraud (and whose directors are serving porridge, even under the lax UK approach to fraud). Operating profits and turnover were growing, but not as fast as the market expected.

The problem then is that having missed one quarter or half year's targets and falsified the difference, it is most unlikely that you will neet the subsequent period's yet higher targets (and to do so honestly requires you to back fill the cash hole your fraud created in the frist case, so an even bigger ask). The fraud gets bigger, and very soon you're having to pay dividends on false profits, leading quickly to debt and solvency problems. Even if you don't have cash problems, when the cat is out the bag it usually triggers breach of covenant clauses, the banks want their loans repaid, and then you certainly do have cash problems.

Incidentally, corporate accounting fraud creates an opportunity for unscrupulous lenders (= all of them) to trigger a solvency crisis, and take an otherwise sound company out of the hands of the shareholders, and then re-sell it as a going concern, keeping all the loot for themselves. Not mentioning any particular thieving Scottish based bank, of course.

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Re: Enron, MCI, Stamford International Bank, Bernie Madoff

Enron and Madoff were definitely Line Your Pocket scams. Lining your pockets always means somebody is taking a serious loss. I'm not as familiar with the MCI and Stamford cases.

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