Olympus Whistleblower Captivates Cayman Conference

Olympus Whistleblower Captivates Cayman Conference

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Michael Woodford

The keynote presentation by former Olympus CEO and President Michael Woodford was one of the most eagerly awaited moments of Day One of GAIMS Ops Cayman 2016. The session was highly anticipated, not just for the intrigue and suspense of his story, but also the fact he was now telling it in the Cayman Islands, where secretive Cayman companies were used by the corporation to disguise funds paid as vastly inflated advisory fees on some extremely unusual acquisitions by the camera and medical imaging manufacturer.

The level of suspense was tightened after the involvement of Japanese organised crime, which raised the stakes considerably for Woodford, leading him to fear for his life and for that of his family, if he were to do what he thought was right and what increasingly seemed to be the only option available to him.

In addition to exposing the high levels of corruption in corporate Japan, where loyalty to your company comes before all else, it also highlighted the extreme cultural differences between Japan and the west, with even the domestic media in Japan seemingly uninterested in digging deeper nto these events. A small Japanese magazine called FACTA was the one to break the story and once the international press, such as the FT, New York Times and Wall Street Journal got hold of it, Woodford was running out of options and after commissioning and receiving indisputable evidence from a major accounting firm, he knew that the company he had been with for 30 years and President for just the last few weeks, was rotten to the core. Then he know he would have to blow the lid off the story, despite the best efforts of his fellow executives to stop him.

The loyalty that Japanese businessmen display to their company can be compared to the unconditional love a parent has for their child. Breaking loyalty to your company is unforgivable, as Woodford found when he was sacked by Olympus, just days after blowing the whistle.

Woodford’s story presents one of the most extreme examples of ‘what would you do?’ if put in the same position. It also contrasts to similar situations in the West, where whistleblowers are courted by government regulators. One former prosecutor attending said that the whistleblower programme in the US is the most significant method of identifying criminal fraud. It is a major focus for the government and is critical to their ability to identify crime. “The key advice I would give to any person in a similarly complicated situation is don’t compound your individual culpability or criminal culpability,” he said. “It is always best to come forward and tell the government what is going on. By taking any further steps you can get caught deeper in the investigation.”

In the US, it is not unusual for a whistleblower to get millions of dollars in compensation and still end up doing jail time. The law enforcement perspective is that the whistleblower and level of culpability doesn’t matter. Getting the information from such human sources is the number one way for them to get information and a key component of law enforcement.

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