Olympus Sells Mobile Phone Unit

Aug. 24, 2012
 Sold for $674 million to domestic investment company. 

Scandal-hit Olympus said Friday it will sell its mobile phone unit to a domestic investment fund for $674 million as the camera and medical equipment maker eyes a return to profitability.

The 53.0 billion yen sale of ITX Corp would be posted as a one-time gain in the firm's second-quarter financial report, but "the impact of the sale on our earnings is uncertain at this point," the company said.

The buyer was Japan Industrial Partners which Olympus described as "one of (the) leading investment funds in Japan."

Olympus had reportedly purchased an increasing stake in ITX -- once a technology startup investor that later became a mobile phone retailer -- over the past decade in hopes of using the investment to make up for losses central to its accounting scandal last year.

The sale announced on Friday came as Olympus looked to revamp its business and lure outside investors after reporting a 4.46 billion yen loss in the April to June quarter.

For the fiscal year to March, Olympus has said it expected to book a net profit of 7.0 billion yen on sales of 920 billion yen.

The firm's reputation, and Japan's corporate governance image, were badly damaged after its British former chief executive blew the whistle over $1.7 billion worth of losses that the company had moved off its balance sheet.

The firm initially denied allegations it had used past acquisitions and outsized consultant fees to hide the huge losses dating back to the 1990s, but eventually admitted wrongdoing.

In March, the company and three former senior executives -- including ex-president Tsuyoshi Kikukawa -- were charged over their role in the scandal.

Olympus has since announced a major overhaul that includes cutting about seven percent of its workforce, while its new chief has publicly said he is seeking a capital injection from investors to shore up the company's finances.

Copyright Agence France-Presse, 2012

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