Olympus' top shareholder reduces stake

The top shareholder of Olympus said Thursday it cut its stake to 5.11 percent from 8.18 percent, after the scandal-hit Japanese precision instrument maker said it covered up losses dating back to the 1990s. Nippon Life Insurance Co. cited "risks" and the need to recognise "economic rationality" to protect customer interests, with Olympus shares having dived during the deepening scandal over payments made in a series of deals. "We sold a part of our stake, considering the current uncertain situation," Nippon Life Insurance, Japan's top life insurer, said in a statement. The group stressed however that it still held the core operations of the scandal-hit firm in high regard. "We believe the strength of Olympus' core businesses and its high level of technologies will be maintained," it said. The insurer previously held an 8.10 percent stake in Olympus while group company Nissay Asset Management Corp. held a 0.08 percent stake, according to Nippon Life. The insurer cut its stake to 4.90 percent, while Nissay Asset increased its shareholding in Olympus to 0.21 percent. Olympus shares gained 12.83 percent to 835 yen in Tokyo trade, despite pressure on the firm after Britain's Serious Fraud Office said it was investigating, along with probes by Japanese and other international agencies. The Tokyo Stock Exchange has warned the firm could be delisted if Olympus does not file its already delayed earnings by a mid-December deadline, in accordance with exchange rules. The share price was around 66 percent below the closing price on October 13, the day before Olympus ousted British CEO Michael Woodford who said he was fired after he questioned payments made by the firm in a series of deals. Olympus admitted last week that it covered up huge investment losses dating back to the 1990s with fees for acquisitions and consultants. Local media have reported that the losses may total more than 100 billion yen ($1.3 billion). Nippon Life's announcement came as Olympus asked its creditors for continued lending with a pledge to reduce debts by $3.4 billion. The company promised its main lender Sumitomo Mitsui Banking Corp and others to reduce interest-bearing debts by 260 billion yen in three years from the current 660 billion yen, the Nikkei daily reported. In the meeting at a Tokyo hotel Wednesday, Olympus asked banks for continued lending in exchange for its promise to correct and improve its financial books, it said. About 100 representatives from about 40 financial institutions came for the one-hour closed-door gathering, the Asahi Shimbun said. Sumitomo Mitsui held loans to Olympus worth 227.5 billion yen as of September, followed by the Bank of Tokyo-Mitsubishi UFJ with 142.8 billion yen and Mizuho Bank with 85.9 billion yen, the Nikkei said.