Olympus chief executive resigns over drug allegation

The chief executive of Olympus has been forced to quit following an allegation that he had purchased illegal drugs.
Stefan Kaufmann, a German citizen, was appointed to lead the Japanese endoscope manufacturer in April last year.
The Olympus board found that he had “likely engaged in behaviours” that were inconsistent with its code of conduct, values and corporate culture.
Olympus said an allegation had been made against Kaufmann of purchasing illegal drugs and that following an investigation, the company’s board had asked him to offer his resignation.
“Stefan Kaufmann was asked to offer his resignation, which he did and which was subsequently accepted by the board of directors,” the company said in a statement.
Kaufmann had been tasked with expanding Olympus’s medical equipment business after its former chief executive, Yasuo Takeuchi, 67, presided over a number of asset sales.
Olympus was targeted by the US activist investor ValueAct in a campaign that pushed it to accept three foreign board directors in 2019.
Takeuchi remained at Olympus as executive chairman under Kaufmann’s tenure and will temporarily return to his position as chief executive as the company considers possible replacements for Kaufmann.
The German, 56, had worked at Olympus for two decades in a number of senior roles, including chief strategy officer and chief transformation officer. At the time of his appointment as chief executive, the company said that he had “a strong track record in driving transformational change” at the company in the Europe, Middle East and Africa (EMEA) region.
On his appointment Kaufmann touted a “new Olympus” with transformed governance and a sharpened focus on selling medical devices.
Established in 1919 and initially specialising in microscopes and thermometers, Olympus now has around 70 per cent of the global endoscope market — cameras used to look inside the body — and is a manufacturer of optics products.
It was originally known for its cameras, which it had made since 1936, though it sold the division in 2020 to focus on medical equipment as the wider camera industry suffered a downturn after the advent of smartphones.
Shares in Olympus fell by 5.6 per cent as news of the resignation emerged, placing it on track for its biggest one-day fall in almost three months. Over Kaufmann’s tenure, the company’s stock has undershot the Nikkei 225 on which it is listed, rising by 16 per cent in contrast to the Nikkei’s 38 per cent jump.
Japan’s tough laws on drugs have damaged the careers of a number of foreign executives. In 2015 a Toyota Motor executive from America resigned after she was arrested in Japan on suspicion of illegally importing the painkiller oxycodone. After being detained for 20 days, she was released without charge.
Japan as a whole has had few foreign senior executives, a number of whom have left under a cloud. Most notably the Brazilian-born Carlos Ghosn, the former chair of Nissan, fled Japan covertly in 2019 after facing financial misconduct charges, which he continues to deny.
Olympus itself has been involved in a number of controversies over the years. In 2011, the company admitted that it had used fraudulent accounting practices to cover up losses on investments over the course of decades.
The fraudulent practices were revealed by the company’s former chief executive, Michael Woodford, and led to a number of former executives pleading guilty to charges of falsifying accounts and $646 million in fines.
British-born Woodford was the first foreign chief executive of Olympus to be unexpectedly ousted, holding the position for just two weeks before his inquiries over the company’s accountancy scandal prompted his removal.
Kaufmann was brought in shortly after Olympus received warning letters from the US Food and Drug Administration about violations related to reporting requirements and quality system regulations for endoscopes and related accessories.
“Olympus apologises deeply for the concern this has caused to our shareholders, customers and all stakeholders,” the company said on Monday.
Kaufmann did not respond to a request for comment.