Olympus CEO ousted after allegation of illegal drug purchase, shares slump

Tokyo: Japanese endoscope manufacturer Olympus Corp said on Monday it has sacked Chief Executive Stefan Kaufmann after an allegation that he had purchased illegal drugs, sending its shares sliding 6 per cent.

Kaufmann, a German national who only took the helm in April last year, had been tasked with expanding Olympus' medical equipment business after preceding CEO Yasuo Takeuchi steered the company through years of asset sales.

Takeuchi, 67 and an Olympus director, will take on CEO duties again for the time being, the company said.

"Upon receiving an allegation that Mr. Stefan Kaufmann had purchased illegal drugs ... Olympus, in consultation with outside legal counsel, immediately investigated the facts," the company said in a statement. It declined to comment on who made the allegation or details of the investigation.

"Based on the results of the investigation, the Board of Directors unanimously determined that Mr. Stefan Kaufmann likely engaged in behaviours that were inconsistent with our global code of conduct, our core values, and our corporate culture."

The board asked for his resignation and Kaufmann complied, the statement said.

Reuters was unable to reach Kaufmann for comment.

According to Kyodo news agency, Olympus consulted the police about the matter. Police searched Kaufmann's house in June but found no illegal drugs, it reported, citing an unidentified investigative source.

A spokesperson for the Tokyo metropolitan police said the information was not something it had announced.

Kaufmann, a 56-year-old veteran of more than 20 years at Olympus, took on the top job shortly after the company had received warning letters from the U.S. Food and Drug Administration about violations related to reporting requirements and quality system regulations for endoscopes and related accessories.

His two main priorities had been addressing those regulatory issues and growing the firm's core medtech business, according to a person who has worked with him and spoke on condition of anonymity.

Olympus was interested in deals in digital technology and robotics after selling off its camera, voice recorder and microscope businesses, Takeuchi told Reuters in a November 2022 joint interview with Kaufmann.

Olympus' 6% tumble on Monday put the company's shares on track for their biggest one-day fall in nearly three months. Since Kaufmann became CEO, the company's stock has climbed 16%, underperforming a 38% jump for the Nikkei 225.

Olympus has had its fair share of corporate scandals.

Thirteen years ago, its first foreign CEO, Michael Woodford, exposed accounting fraud related to overpaying for acquisitions to hide losses.

Woodford was fired soon after his appointment and lost a battle to take control of Olympus.

In 2015, Toyota Motor executive Julie Hamp, an American, was arrested in Japan on suspicion of illegally importing the painkiller Oxycodone into the country. She was later released.