Ex-Olympus executives arrested

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Japanese prosecutors swooped in on three former executives of Japan's disgraced Olympus Corp on Thursday (February 16) over their role in a the company's 1.7 billion U.S. dollar accounting fraud.

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 in a statement.

Also arrested were four others, including former bankers Akio Nakagawa and Nobumasa Yokoo, suspected of helping the executives hide huge investment losses through complex M&A deals.

In December, Yamada told reporters he felt a "heavy responsibility" for what had happened.

"I sincerely regret what I've done to both the shareholders and everyone in Japan," he had said.

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, and whether Olympus will seek a capital tie-up to fix its balance sheet.

Last year, the investigative panel found Kikukawa, Mori and Yamada had played leading roles in a 13-year scheme to hide the losses, and they are among 19 executives Olympus is suing over the scandal.

The scandal was exposed last October by then-chief executive Michael Woodford, a rare foreign CEO in Japan, who was sacked by the Olympus board after questioning dubious M&A deals that were later found to have been used to conceal the losses.