Day 2 007 - Michael Woodford - Exposure: From President to Whistleblower at Olympus

if you like a bargain I'm Norley paid 25 thousand US dollars or more for giving this talk sure yeah but I was with Mary in Sydney and we were talking and she explained I'd never heard of the Justice Network for tax and so I was convinced it's a worthy organization so I know we talked for 90 minutes and I explained you know from the beginning to the end what it's like when you get in one of these situations where your life spirals out of control olympus if you don't know it it you probably think it's a camera company which it is but its main businesses endoscopes these are the tubes they put in any natural orifice and where there isn't a natural orifice with keyhole surgery they can make one and it's because of that fact and they have 70 percent of that market they employ forty five thousand people is one of Japan's top 50 companies and a world leader in health care I joined when I was 21 and 30 years later I became the first non-japanese president I had run the companies in Europe the United States and finally the world by they based in Tokyo but two months after I was in Tokyo I received an email from a friend who happens to be a board member of one of Japan's largest companies better known than Olympus even and he told me have you seen this art article in fact er never heard a factor of knish magazine which I thought was a sensation as magazine when I first looked at the claims because it said Olympus has spent 1.7 billion u.s. dollars on the most questionable M&A practices now Olympus is board was made up of men in their late 50s 60s and 70s know women and very conservative all have been to the best universities in Japan dark suits the then president Kiko kawasan had been my favorite uncle if you like he made me the president of Olympus of the Americas very controversial in a Japanese company the Americans didn't like you to a Brit coming over then I went to run Olympus Europe and that was based in Hamburg where I stayed for eight years that was a German company principally and then to my great surprise asked me to be his successor and I really liked Kikukawa son he had the most charming smile he had the physique of a jockey very slight very small perfect English had run the American company I remember you mentioned my passion for road safety running the Road Safety Foundation and I remember when I was awarded an MBE for services to road safety he's I think thought it was a knighthood and I didn't disabuse him of that fact people called me sir for a while but he was so happy he organized the party in the most expensive Italian restaurant in Tokyo and then gave me a Mont Blanc pen I mean he was so kind and generous he knew the name of my wife and my children I have a very domineering bossy Spanish wife he has a very deferential Japanese wife and when I went on business trips it was always a pleasure to ethan these nice restaurants but he told me when he was at home and his wife went away they had all his dinners put in little Tupperware's with labels where you know I was using delivery whatever the takeaway was at that time so I'd been with the company thirty years I had a great affection for Kikukawa this thing came out in in fact I would never have known if it hadn't been for my friend and that transpired to be a 1.7 billion dollar fraud the biggest fraud in Japan it's known as the Enron of Japan and in the questioning session we have at the end there are issues that the the role of the big four accounting firms and two of them were involved in this story or their Japanese practices were the way they behaved but I haven't got 90 minutes so I just want to give you a flavour a feel of what it's like and the way people behave and the thing I got wrong and it's perhaps my own ego my own vanity I thought not the Japanese bad guys if you like but I thought my colleagues in this country in Hamburg in the United States the people around me in the directors and if you saw my family album you would see several of the British directors you know with my children as babies I mean I was very close to these people they were all well-paid all had contracts with at least two years protection whatever happened and they helped me expose the fraud two of them a chartered accountants but it was when it was exposed how people move away how isolated you are and that's what I got wrong the way people act and there were these guys and women were no different to you I don't think you know you don't know until you're tested they would say in their defense you know my priorities my family I have to look after my family my nuclear family but the way people move is is extraordinary I would never have thought that these men and women who were highly paid had I've been their sponsors would just leave you win it and the hits the fan but the one scene I'd like to show you is really when I first challenged Kikukawa kakera was the president had been the president for 10 years at the time was 73 years old been with the company all his life and I had gone out with him it was a second of August 2011 and we'd gone out in the morning for a meeting at 8 o'clock with Japan's largest electrical retailer a bit like Dickson's in this country or Mediamark in in Germany or Best Buy in the US you know and I liked this company because the founder and chairman was very altruistic I don't believe in inherited wealth heeded and he'd set up all sorts of charitable foundations and in Japan when you have a business meeting you don't talk about business at that level you know I wanted to tell him about the new pen F Micro Four Thirds camera which is a retro style and a beautiful beautiful camera but I knew we wouldn't talk about it so we had this meeting I'd only been the president since April the first so three months in and the week before I'd found out about this story and factor but I hadn't spoken about the President had been in Europe when I found out it I'd only got back to Japan the night before so we met her to eight o'clock in Japan the Board of Japan we all have a limousine I did suggest trying to be eco-friendly that when we had a meeting with the board we should share cars at least share cars and I was quickly told that's not the way I had the second best car on the fleet that black Lexus I didn't ask for a Jaguar as I had in Europe but they didn't allow me to have that the president Kiko Carson had more bells and whistles a special phone system he had I remember so we met at eight o'clock and the meeting was very cordial it was conducted in Japanese although all the people there spoke English and there was a translator for me because I'm not a linguist unfortunately typically English and near the end of the meeting in Japan you give gifts and the chairman of the retailer store a store opened up this red blotting pad and took out two tickets for a big baseball game in Tokyo and gave me two and then he passed another two to keep her kawasan and just in my poor Japanese house I'm gonna say thank you I hope that from the peripheral of my vision Kiko car was hand come in and take the two tickets out of my hand and put them to join his two and he then switched into English strangely for my benefit to explain to the Chairman that Michael Michaels English and he likes soccer and doesn't like baseball now I had worked in the States we did a lot of research in Boston at Boston and mass and been to see the Red Sox and I like any big event in Japan and it's just the rudeness and you know you wouldn't do that to anyone would you physically take the tickets and I had seen a different side since I've been in Japan in those three months I'd known T could cover for thirty years but when I was in Tokyo at the board meetings with simultaneous translation this smiling charming man if any of the other directors made any even the most nuance difference of opinion he would be ruthlessly cut them down I mean he really was I really came to realize the emperor all-powerful surrounded by sycophants I was allowed to rattle on and be as controversial as I liked I hadn't had to change my behavior but it was evident that he had a side to him which I hadn't realized and that small taste of it on that meeting so the meeting ends at nine o'clock I thought because this thing was out in Factor it's in the public domain you can buy factor in Shinjuku where Olympus has its world headquarters on the newsstand outside it's an online journal you that with hard copies too and I thought at the end of this meeting he'd say come and have some tea and tell me what was going on because I simply didn't believe Olympus would would do anything dishonest I mean I didn't think that these guys of the board and the color to do anything dishonest never mind do anything dishonest but nevertheless it's quite serious if you know can you imagine it in this country for 40 100 company or a DAX company in Germany or on NASDAQ company or you know a listed large listed company in any jurisdiction if allegations were made like this it would it would it would go into the mainline media never mind just the financial media but it didn't invite me for tea he got in his car to go back to our head corporate headquarters called the monolith the monolith building funny choice of name with forehead corporate headquarters and I followed to travel through the Tokyo rush-hour traffic 45 minutes or so in the car behind and I was seething a by the man's rudeness but then he he didn't tell me what was going on you know where's this 1.7 point five billion so I phoned my secretary Michiko up and she's a lovely lady she was a joined just just as I became the president she was a former stewardess for Cathy Pacific she was a purser in the first-class cabin and whilst I might not believe in inheriting I do I did enjoy private jets and champagne and nice hotels but Michiko really should have been the president she was bright intuitive instinctive and could read people and at any meeting or whatever she would tell me in very 16 to March this person is dishonest whatever she was wonderful and she became the person closest to me and helped me in in the months I was there I'll always have a great fondness but I regret my abruptness but I said Michiko I do need to see German Kikukawa he became chairman when I became president today and she said Oh Michel you would like to see the Chairman at his earliest convenience and she was trying to tell me she did so many times the protocols of Japan it whilst I was the president I did not tell the former president and now German to meet me at my convenience and she just wanted to presented in the right way and listener Michiko I need to see him today and should you want me to stress it's very important and you'd like to see him as soon as possible she really tried and I was so preoccupied with it I snapped the back at her I want to see him today Michiko please organize it I don't care what time and I'd like to see him with Maurice and Maurice Ann was number three he was a in effect the chief financial officer of the company and you know when you feel down the phone when someone it's flat and it wasn't because she was a roué I've been rude or abrupt it was because she thought I was gonna hurt myself and she said okay right and the phone went down and I was watching Kiku cow was it was two or three vehicles at a head and I saw him pick up he had in his phone we all had mobile phones but he had an analog phone fitted in the car maybe you thought it gave you brain cancer or something but I don't know why he had this thing but and then his head was nodding I can see the back of his head clearly agitated and I presumed it was my call my mobile rings and his Machiko Michael I've spoken to mr. Kikukawa secretary who's spoken to mr. Keefe Okawa mr. Kikukawa is very busy today but because you're so insistent and she highlighted the word assistant he will see you at 12 noon in room g37 - and I could tell and I again I felt uncomfortable but like this what is 1.7 billion dollars you know I was starting to believe there was something in it now so we get there 12:00 noon and I get into the room I come in from the left and there is the board you can be mr. CooCoo Kawa you're mr. Mori you just need to move away a bit just two people in a long board table and I come in Kikukawa this has a smile like yours very charming smiling away please sit down Michael you're typically Japanese it's not a bad manners or anything but you don't give him anything away with your facial characteristics you know you do when you go out to the bar at night but not in the in the day and I walk in and the first thing I notice is a large platter of sushi and my favorite food in Japan is sushi and these fans go off all the time don't they next where I was going to sit in the center was a tuna sandwich a monkey-looking tuna sandwich it wasn't even you know no crisps or salad on next to it if you know Japan nonverbal communication is a big thing I mean that sandwich had been bought in cafe quest on in the subterranean shopping now love you know you would never in Japan probably careers similar you'd never serve to the president or anyone a sandwich in a cling film and it was to tell me that in Olympus knowing that sushi was my favorite food that I'm the man ki tuna sandwich a new Keiko kawasan is the luxury sushi platter and that platter would have cost around $2,000 it had a little flag in it telling me it was from the most prestigious still fish stall in Tokyo fish market this was before the fish market moved and it threw me it disorientated me so I come in you're smiling away and I say Kikukawa saying you know what's this and I showed him the factor magazine and he said yeah it's an article and I said is it true and you said some of it and then I started to push you and you said calm down Michael calm down I'm a Liverpudlian I've lost my accent but you don't tell a scouser to calm down and English you'll understand that's the reversing and I hadn't even got going never mind calm down and I said you know Tom you know I was the only person could call him Tom it wasn't his name but my pronunciation of his real name he told me to call him Tom years earlier Tom I have to understand this I'm the person who signed the company is account I'm the person who signed the letter of representation and you you said Michael you know this is just a domestic matter please don't worry about it and I said I am worried about it and can I suggest he became evasive his left eye while smiling his left eyebrow started to shake can you do that these South Koreans are hopeless on them I act again I said can I meet alone with Morrison they didn't like that you and I got on well we always talked about American politics very quiet cerebral intelligent I mean you're foxy your instinctive you didn't get where it was but you couldn't stop me you reported to me so you huffed and puffed and left the room you can just move away a bit stage left so I come to you and the first thing you say is Michael let's have a toilet break and you never say that in Japan why would you so off we go to the the executive urinals normally the men would tell when you're next to someone you always talk if you know them wasn't that great match last night or you know the lionesses would have should have won or whatever we might have said but nothing silence came back you sat in front of the untouched luxury sushi platter me in front of the tuna sandwich and I said to you mori-san hood you know hello and what is all of this and I started to go through the three allegations Olympus had ball with these Mickey Mouse companies a face cream company and I said why we bought a face cream company it was a shell company and you said you know well it's a good for business expansion well then we were a digital optical company they bought a microwave dish company and I said you know why we bought a microwave dish company and you ignored me the just glanced off you but you stopped not answering my questions so I started laughing it's like a black comedy and pushed you and though you chose to answer you said it helps people with diabetes what a load of bollocks own and and I got angry I really got angry and I came around the table and you stood up now you don't do this in Japan you don't get close to people and you don't stand up and I shouted at you you know got fired for hey and this calm cerebral man and I'll never forget to the moment I died you know your facade dropped and you use your finger to tell me the answer and I thought you would say I work for you Michael I work for Olympus but you didn't you said and what do you do I was shocked and I just walked away and I knew there and then by the way you had behaved and you'd behave there was something rotten at the top of this corporation of 45,000 people which are is the president and I had no idea what to do and that's really just the start of the story so you have to buy the book exposure it's I've had my 20 minutes [Applause] you

Channel: Tax Justice Network

Views: 513

Rating: 5 out of 5

Keywords: 2-07-2019

Id: K_E2d-PIC34

Length: 19min 34sec (1174 seconds)

Published: Mon Jul 08 2019