Akio Nakagawa, a key figure from Olympus Corp.’s (TYO:7733) acquisition fee scandal was found in Hong Kong yesterday by the Reuters news agency.
The Japanese banker, whose company received an unprecedented $687 million payout during the Tokyo-based technology giant’s $2.2 billion acquisition of the Gyrus Group in 2008, was found living in a luxury high-rise near Hong Kong’s financial district.
Nakagawa, a former PaineWebber banker, refused to answer any questions about the financial scandal, according to the news agency.
Former Olympus CEO Michael Woodford broke the story in October with claims that he was terminated just two weeks after taking the corner office for commissioning a PricewaterhouseCoopers investigation that uncovered abnormally steep advisory fees related to the Gyrus deal.
Most of the payments went to a pair of mysterious entities called AXES and AXAM. The PwC report identified former Wall Street banker Hajime "Jim" Sagaway as the lead for AXES and the director of AXAM, which is a tax haven incorporated in the Cayman Islands.
Woodford also questioned three other 2008 acquisitions that cost a total of $773 million and were written down by 75 percent that year. He submitted a report to Olympus senior management Oct. 13, including a call for the resignation of several members of the management team, according to an Olympus press release.
Olympus admitted to channeling nearly $1.5 billion in possibly illegal payments to conceal heavy losses on investments over the last two decades.
Regulators in the U.S. and Japan are investigating allegations that Olympus channeled more than $1.5 billion through offshore funds after suspicions were aroused by Woodford, according to Bloomberg BusinessWeek.
Olympus shares have lost more than 60 percent since Woodford’s mid-October termination, falling from a closing price of roughly $31.91 (¥2,482) Friday, Oct. 13, to about $12.75 (¥990) in mid-morning trading today.