Kikukawa, six others arrested as Olympus investigation continues

The months-long investigation into financial irregularities at Olympus Corp. has finally resulted in its first arrests today, and they come at the very highest levels of the company's former management. Those arrested include the Olympus' former CEO, president and chairman Tsuyoshi Kikukawa, ex-executive vice president Hisashi Mori, and Hideo Yamada, the company's former corporate auditor.

Four other individuals were arrested at the same time. Akio Nakagawa, formerly of Axes Japan Securities, is said to have helped create the web of companies used to conceal Olympus losses sustained in the 1990s. As president of Global Co., Nobumasa Yokoo apparently assisted in Olympus' purchase of News Chef, Altis, and Humalabo, three unprofitable Japanese companies purchased for ¥73.5 billion by Olympus, which wrote off three quarters of that investment the following year. Taku Hada and Hiroshi Ono, meanwhile, were also executives of Global Co.

All seven men were arrested on suspicion of having violated Japan's Financial Instruments and Exchange Act, and according to the Wall Street Journal, have yet to be officially charged.

Ex-Olympus CEO Michael Woodford--who played a key role in uncovering the scandal after early reporting in Japanese financial magazine Facta--held a press conference in London after the arrests. While welcoming the news, Woodford called for further investigation into the role of banks and accounting firms, says Bloomberg.