Olympus Under Investigation by U.S. Justice Department for Possible Anti-Trust Violations--Update

By Takashi Mochizuki 

TOKYO--The U.S. subsidiary of Japanese camera and medical-equipment maker Olympus Corp. said Friday it is under investigation by the U.S. Justice Department for possible violations of anti-kickback and false claims laws, and that any settlement could weigh on the company's earnings ahead.

Olympus Corporation of the Americas has been under investigation since November 2011 for possible violations of laws that normally apply to inappropriately encouraging medical professionals and institutions to buy goods and services, the Japanese parent company said in a statement.

"Depending on how the matter progresses and other factors, our consolidated results of operation may be materially adversely affected," the statement said.

An Olympus spokeswoman said the company entered into discussion with the U.S. authorities in the October-December quarter, and since the investigation was ongoing, it couldn't say anything beyond what was provided in the news release.

She said no information on financial damages that might incur from the investigation was available. Nor was there an estimate on how long the discussion with the U.S. government would take.

"We can't say this would really affect our upcoming financial results, and even if it does, we don't know when we would feel the impact."

On Friday, Olympus reported a Yen31.93 billion ($273 million) net profit for the April-December period, up from Yen5.84 billion a year earlier, as the medical and scientific-research equipment business performed well.

Earnings were also helped by a weaker yen, which makes Japanese products more price competitive abroad and increases the value of profits returned to Japan. The company had Yen550.02 billion in revenue during the nine-month period, up from Yen513.67 billion,

For the full-year ending March, Olympus forecasts a Yen45 billion net profit, an Yen88.0 billion operating profit and Yen760 billion revenue. This doesn't take into account any fallout from the current investigation, however.

Write to Takashi Mochizuki at [e-mail]

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