Sony set to invest $642M in Olympus

Summary:The Japanese electronics firm is reportedly set to make its investment by this week, which will make it the largest shareholder with a 10 percent stake.

Sony Corporation is reportedly set to invest 50 billion yen (US$642 million) in scandal-ridden Olympus by this week, becoming its biggest shareholder with a 10 percent stake.

In a Reuters report Tuesday, three unidentified sources familiar with the plan said as part of the deal, Sony will set up a joint business with Olympus to develop new medical equipment, and send an executive to join its board of directors.

As it draws back from its loss-making television business, Sony is turning to new businesses, including medical equipment, to increase its revenue.

The report added Olympus could prefer a capital injection from Sony , as opposed to offers from closer business rivals such as camera maker Fujifilm and medical device maker Terumo .

Meanwhile, three former Olympus executives pled guilty to charges related to last year's accounting scandal, according to a separate report by Reuters.

At a Tokyo district court, ex-chairman of Olympus, Tsuyoshi Kikukawa, said: "The full responsibility lies with me and I feel deeply sorry for causing trouble to our business partners, shareholders and the wider public. I take full responsibility for what happened."

The other two charged were former executive vice-president Hisashi Mori and former auditor Hideo Yamada.

The news comes nearly a year since Olympics got embroiled in one of Japan's largest corporate scandals involving accounting fraud. It started last October when former CEO Michael Woodford publicly questioned the company's accounting irregularities , days after the board fired him. Olympus later confessed to have covered up massive investment losses since the 1990s, and saw Kikukawa, Mori and Yamada quitting their posts.

Topics: Tech Industry, Legal

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Jamie Yap covers the compelling and sometimes convoluted cross-section of IT and homo sapiens, which really refers to technology careers, startups, Internet, social media, mobile tech, and privacy stickles. She has interviewed suit-wearing C-level executives from major corporations as well as jeans-wearing entrepreneurs of startups. Prior... Full Bio

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