Exposure Review

Exposure: From President to Whistleblower at Olympus

Penguin (2013)

ISBN: 978-0241-9636-16
Paperback, 272 pp

Exposure: From President to Whistleblower at Olympus.

One of the biggest financial scandals in Japanese history was the 2011 scandal surrounding Olympus Corporation. The scandal is said to have involved $US1.7 billion, or more.

In April, 2011, British national Michael Woodford, who had worked at Olympus for 30 years, became chief operating officer, and in October of that year he took the reigns as chief executive officer. Almost immediately after becoming CEO, Woodford sniffed out giant financial shenanigans in Olympus and started asked questions.

Two weeks after taking over he was fired for, it turned out, having uncovered the malfeasance, but he remained on the board of directors as those positions are determined by shareholders.

Fearing for his life, and suspecting that Japan's yakuza might be involved in the fraud - a suspicion that turned out to be erroneous - Woodford fled Japan and headed home to England.

He immediately contacted the Serious Fraud Office and New Scotland Yard, and was interviewed by a number of major media. He had covered his bases well by sending emails with his questions and suspicions to numerous people. The word was out, and he was safely, hopefully safely, in England.

In 2012, Woodford wrote this book about the whole sordid affair.
One thing that many readers must overlook is the seemingly unquenchable ego that Woodford displays throughout the book. He is to be commended for working his way up from a lowly start in life, but he is eager to let everyone know how posh his lifestyle was.
There are numerous examples of this, from his expensive champagne to his hotel room with the 1,000-book library and baby grand piano. Admittedly he was upgraded to that by his hotel for being a frequent customer, but you get the idea.

The book was written in late 2012, and occasionally references are a bit anachronistic. For example, of the four foreigners who had headed major Japanese companies he writes, "with only Carlos Ghosn of Nissan remaining, Japan seemed to be shutting the doors (on foreign leaders of Japanese companies)." The door on Ghosn would later shut as he escaped the country in 2019 while hiding in a musical instrument box while out on bail for alleged crimes during a later corporate scandal involving a foreign CEO.

One thing that inquiring minds will want to know is what happened to the bad guys involved. How many of them got locked up in jail and for how long? The book doesn't answer these questions, but the info can be found on line. Hint: Not many and not long enough.

The civil lawsuits were more fruitful. In May of 2019, well after the book was published, the Tokyo District court handed out a fine of 59.4 billion yen (then US $594 million) to the three main miscreants, former president Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former statutory auditor Hideo Yamada.
Additionally, Woodford was later awarded £10 million for personal damages.

The exact fraud, basically a tobashi scheme, is not fully explained until about ¾ of the way through the book. The explanation may be a little bit hard to follow for some laymen, but readers don't need to fully understand how it worked to understand the gravity of the situation.
After all, $US1,700,000,000 ($1.7 billion) is a lot of fraud.
Woodford's work is easy to read and the pages fly by. Readers don't have to like Woodford personally (though some certainly will) to enjoy the book and learn about an interesting chapter of recent Japanese history.