Japan auditors to approve restated Olympus accounts: media

TOKYO (Reuters) - External auditors of Japan's disgraced OLYMPUS (JP7733.TK)Corp are set to sign off on its restated accounts this week, the Asahi newspaper said on Tuesday, clearing one key hurdle in the firm's struggle to survive a $1.7 billion accounting fraud.

The maker of cameras and medical equipment must publish its second-quarter results by Wednesday in order to keep its stock-market listing and avoid being cut off from capital markets, and will also submit its corrected accounts for the past five years.

Olympus has repeatedly reassured investors that it would meet the deadline to iron out its accounts, but there have been worries over whether its auditors would sign off on them.

Auditing firms KPMG AZSA LLC and Ernst & Young ShinNihon LLC will approve without qualification all the statements except for the year ending in March 2007, which they will approve with qualification, the Asahi said without citing sources.

Olympus' shares at one point lost more than 80 percent of their value after the scandal broke in October, when it sacked its British chief executive, Michael Woodford, who then went public with his concerns about some murky Olympus deals.

Since then, an outside panel commissioned by Olympus to investigate the scandal has found that several former executives had engineered a scheme to hide investment losses for 13 years and had used acquisition payments to aid the cover-up.

Olympus shares, though, have rallied from their lows in recent weeks, with investors betting it will avoid a humiliating delisting. Now about half its pre-scandal value, the stock stood about 6 percent higher at 1,379 yen in morning trade on Tuesday.

KIKUKAWA PERSONALLY FIRED AUDITOR - NIKKEI

Woodford arrives in Tokyo later on Tuesday on a mission to persuade employees and investors that he is the right person to return to his old job and get the firm back on track. He faces a battle with the current board, which plans to resign but wants to first pick their own slate of successors.

Olympus's investigative panel put much of the blame on a former executive vice president and a former corporate auditor, but said past presidents had been made aware of the cover-up.

Tokyo police, prosecutors and the securities watchdog have launched a rare joint probe of the affair and are expected to intensify the probe after Olympus announces its earnings.

The Nikkei newspaper reported on Tuesday that former Olympus president Tsuyoshi Kikukawa had personally dismissed the auditing firm that had raised objections about the murky acquisitions used in the accounting concealment of losses.

The acquisition payments included three unusual domestic deals as well as a massive fee paid to a financial advisory firm linked to its $2 billion takeover of UK medical devices maker Gyrus Group Plc in 2008. KPMG AZSA LLC, Olympus' auditing firm at the time, raised objections to the deals in May 2009, calling them overpriced, the Nikkei said.

In response, Kikukawa went to the firm's offices to say it would not be rehired as Olympus auditor, accusing it of "interfering in management decisions", Nikkei reported.

Kikukawa, who succeeded Masatoshi Kishimoto as president in June 2001, had received updates on the loss-making investments several times a year based on information contained in a secret ledger, the business paper said. These reports were destroyed after each update meeting, it added, quoting unnamed sources.

Kikukawa has not been able to be reached for comment since he stepped down as president soon after the scandal broke.

(Additional reporting by Sunayan Bhattacharjee in Bangalore; Writing by Linda Sieg; Editing by Mark Bendeich)

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