Sony to Invest in Troubled Olympus

Japan's Sony (IW 1000/33) will inject about $623 million into troubled Olympus (IW 1000/362) as the camera and medical equipment maker rebuilds its finances after a massive cover-up scandal, reports said Friday. The 50-billion-yen deal would make Sony the single biggest Olympus shareholder with more than 10% of its stock, according to the Nikkei business daily, public broadcaster NHK and other Japanese media. The Nikkei said the firms are planning to reach a final deal by next month, but the two firms declined to comment on the story. The latest reports come after earlier stories pegged Sony, rival Panasonic (IW 1000/30) and Fujifilm among the likely candidates to invest in the scandal-hit firm. Olympus has announced a major overhaul that includes cutting about 7% of its workforce, while its new chief has publicly said he is seeking a capital injection to shore up its finances. Olympus's reputation -- and Japan's corporate governance image -- were badly damaged after its British former chief executive blew the whistle last year 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.

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