Olympus Ex-President and Six Others Arrested

The former CEO of Olympus, fired for exposing the company's accounting fraud said on Thursday it was a "vindication" seven men have been arrested in association with Japan's biggest corporate scandal. Michael Woodford told journalists in London he welcomed the arrests, including that of the former president of Olympus Corp and ex-bankers for their role in a 1.7 billion dollar accounting fraud at the medical equipment and camera maker.

Tokyo prosecutors arrested ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said. The three former executives had been identified by an investigative panel, commissioned by Olympus, as the main culprits in the fraud. The scandal was exposed in October by then-CEO Woodford, who was sacked by the Olympus board after inquiring dubious mergers and acquisition deals later found to have been used to conceal the losses.

The arrests come as investors focus on who will run the once-proud company when its management steps down at an April 20 shareholders meeting. Olympus is banking on that April meeting marking a turning point in the scandal, with at least six of its 11-member board, including current President Shuichi Takayama, set to resign. His successor is likely to be one of three board members the panel said were not responsible for the cover-up -- Masataka Suzuki, Kazuhiro Watanabe and Shinichi Nishigaki -- said a source familiar with the matter, who did not want to be identified due to the sensitivity of the issue. Woodford heavily criticised the fact that those three board members are still present at the company.