Japan's disgraced Olympus Corp is suing 19 current and former executives, including its current president, for up to almost $50 million in compensation, as it struggles to recover from one of the nation's worst accounting scandals.
The maker of cameras and medical equipment said on Tuesday all board members subject to the lawsuit would quit in March or April, leaving it in the extraordinary position for now of continuing with several directors it is suing for mismanagement.
The company's share price, however, surged nearly 30% on the news, with investors looking forward to the eventual renewal of the board and to Olympus finally drawing a line under a $1.7 billion accounting fraud.
Olympus has lost almost 50% of its market value since the scandal first erupted in October, when it fired its British boss Michael Woodford, a rare foreign CEO in Japan, for questioning dodgy acquisition deals at the heart of the scandal.
"The plan is for the current board members who were found responsible and are subject to lawsuits to complete passing on their roles to avoid any impact on business implementation, and all resign at an extraordinary shareholders' meeting that is set to be held in March or April 2012," Olympus said in a statement.
Woodford, who went public with his concerns after his sacking, said last week he was abandoning a bid to be reinstated to his old job, citing a failure to win support from big Japanese shareholders.
Among those being sued are former Chairman Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former internal auditor Hideo Yamada. An outside investigative panel found last year that this trio had played leading roles in a 13-year scheme to hide losses from Olympus investors.
Former presidents Masatoshi Kishimoto and Toshiro Shimoyama were also included in the lawsuits.
Sources told Reuters on Monday that the Tokyo Stock Exchange was likely to keep Olympus listed under a "security on alert" designation, which would effectively enable it to remain traded provided it showed steady improvement in its internal controls.
The bourse said on Tuesday it had reached no decision on the matter.