Lenders to grill Olympus as delisting looms

Lenders will confront Japans Olympus Corporation this week to demand an explanation for an accounting scandal engulfing the firm, a banking source said on Friday, though he denied reports they would seek more security over their loans.Prime Minister Yoshihiko Noda also weighed in, describing and calling for strict measures to preserve financial markets confidence, according to Reuters.The disgraced maker of cameras and medical equipment risks being delisted from the stock market, and is being investigated by police and regulators, after it admitted this week to hiding investment losses for decades and using M&A payments to aid the cover-up.The Nikkei newspaper said the concealment could have exceeded 130 billion yen ($1.68bn) at its peak, adding creditors were likely to press for a change in lending terms.But the banking source denied this was the purpose of the meeting between Olympus and its creditors, which include Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group and Mizuho Financial Group. The meeting is likely to take place on November 16, two banking sources said.Noda later told a news conference the government attached great importance to strict and transparent accounting and that Olympus case "needs to be dealt with strict measures and Japan wants to secure financial market confidence by doing so."Delisting would effectively leave the 92-year-old company cut off from equity capital markets at a time when its shares have already lost three-quarters of their market value and its balance sheet is vulnerable to major asset writedowns.The stock see-sawed in heavy trade on Friday, losing as much as 10 percent to 435 yen in an initial wave of selling then recovering within minutes to register a small gain.It finished at 460 yen, down five per cent on Thursdays close, having lost $7.1bn in market capital since the scandal broke on October 14.Traders said the volatility would likely persist, with buyers emerging as the stock sinks close to its book value, thought to be around 430 to 436 yen.
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