U.K. prosecutors started a formal probe into accounting irregularities at Olympus Corp. (7733) after the company said last week that three executives colluded to hide losses from investors, a person familiar with the case said.
Britain’s Serious Fraud Office, which prosecutes white- collar crime, will work with the U.S. Justice Department and Japanese authorities, said the person, who wasn’t authorized to speak about the case and declined to be identified.
The company reversed denials last week that there was any wrongdoing over $687 million in advisory fees paid on the $2 billion acquisition of Gyrus Group Plc in 2008 and said they paid inflated fees to advisers to hide losses. Olympus fired Executive Vice President Hisashi Mori over his role in the cover up, former Chairman Tsuyoshi Kikukawa resigned last month, and auditor Hideo Yamada will step down.
“I welcome any investigative process where they have the authority to start following the money,” said Michael C. Woodford, the former Olympus president who blew the whistle on the scandal. “What’s important is that the truth comes out in an explicit and total sense.”
Michael Knuefer, a European spokesman for Olympus, didn’t respond to e-mails and calls requesting comment yesterday.