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Two Former Olympus Presidents Questioned

The two former presidents -- Masatoshi Kishimoto and Toshiro Shimoyama -- have been accused by a third-party panel set up by the company of involvement in the coverup.

TOKYO, Feb. 17 (Kyodo) — Prosecutors have questioned two former Olympus Corp. presidents on a voluntary basis in connection with the company's loss coverup scandal, over which several other former company executives were arrested Thursday, sources close to the matter said Friday.

The two former presidents -- Masatoshi Kishimoto, 76, and Toshiro Shimoyama, 87 -- have been accused by a third-party panel set up by the company of involvement in the coverup. The prosecutors did not arrest the two men on Thursday.

The special investigative unit of the Tokyo District Public Prosecutors Office is investigating the scandal, including how the coverup began and how illegal accounting practices continued for years.

Kishimoto was the immediate predecessor of former Chairman and President Tsuyoshi Kikukawa, 70, who was arrested along with two other former executives and others on suspicion of falsifying the company's financial reports to conceal massive investment losses.

Shimoyama became president of the Japanese camera and medical equipment maker in 1984 and continued to serve in the company's highest posts until 2004, including chairman of the board.

Kishimoto succeed Shimoyama as president in 1993 and retired from the company in 2005 after serving as chairman.

The coverup began at Olympus after the company was saddled with massive latent losses resulting from financial investments in the 1990s. Kishimoto and Shimoyama had learned of the losses by 1993, according to the sources.

The company began concealing the latent losses when Kishimoto was president. After Kikukawa became president in June 2001, people including former auditor Hideo Yamada, who was among those arrested Thursday, kept Kikukawa, Kishimoto and Shimoyama informed of developments regarding the losses on a regular basis, according to the sources.

In interviews with Kyodo News, both Kishimoto and Shimoyama have denied any involvement, although the third-party panel and another Olympus panel that looked into the responsibility of company executives have concluded they were aware of the coverup.

The two men are defendants in a damages suit filed by Olympus against 19 current and former executives, including President Shuichi Takayama, demanding that they pay up to 3.61 billion yen in compensation in connection with the coverup of massive investment losses.

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