TOKYO (AP) -- Embattled Olympus Corp. is establishing what it says is an independent task force to review past acquisitions, seeking to ease mounting shareholder pressure over the abrupt dismissal of its CEO who questioned a $687 million payment to financial advisers.
The camera and medical device maker said Friday the committee will include outside lawyers and accountants who will investigate deals that have come under scrutiny since ex-CEO Michael Woodford presented allegations of potential financial wrongdoing.
The company also said it is working to answer letters sent by concerned investors.
Olympus' latest move comes after its shares endured a brutal week, shedding half their value. More than $4 billion of its market value has evaporated.
Shareholders and analysts say the escalating scandal highlights longstanding corporate governance problems in Japan, where board independence is rare and companies face less outside scrutiny.
Woodford has said that his firing last Friday is linked to his probe of a $687 million payment to financial advisers as part of Olympus' purchase of U.K.'s Gyrus Group Plc. The payment represented more than a third of the $2 billion purchase. Fees for advisers are normally 1 to 2 percent of the deal value.
Woodford also questioned the lofty prices Olympus paid for three other Japanese companies that appear to have little strategic value.
He commissioned Pricewaterhouse Coopers to analyze the deals and distributed the results to the board of directors. The findings compelled him to call for Olympus executives to resign.
The board of directors fired Woodford instead.
Chicago-based Harris Associates L.P., which owns a 2.5 percent stake in Olympus, is among the major shareholders seeking answers. It sent a letter to the board of directors, demanding an independent investigation and details about the company's mergers and acquisitions procedures.
David Herro, chief investment officer for international equities at Harris Associates, said he is particularly concerned about management's relationship with the generously paid advisers. He blamed Olympus' current woes on "an unacceptably lax approach to corporate governance."
"As long time investors in Japan, we have seen Japanese companies as a group make significant improvements in their corporate governance in recent years, and their shareholders have benefited from this trend," Herro said in a statement.
"In our view, the situation at Olympus shows that we still have a ways to go before all companies in Japan move toward a more independent board structure and embrace their shareholders as stakeholders in the company."
GMI, a research firm that tracks corporate governance around the world, ranks Japan 36th out of 39 countries. It says nearly all Japanese companies operate with a majority of directors who are closely tied to the company, and almost half have no independent directors at all.
The Asian Corporate Governance Association, a Hong Kong-based nonprofit group, sent a letter last year to Japan's Ministry of Justice urging officials to require public companies to include at least three independent directors on their boards. Oversight and monitoring by boards in Japan is "insufficient to protect shareholder interests," the group wrote.
In the U.S., standards are tougher. New York Stock Exchange regulations require public companies to have a majority of independent directors on their boards.
If its turns out that Olympus' board indeed quickly approved Woodford's dismissal without dissent, "that speaks volumes about the way boards run in Japan," said Jamie Allen, secretary general of the ACGA.
Olympus joins other Japanese companies whose corporate governance practices have come under fire in recent years.
Toyota Motor Corp.'s clumsy response to massive recalls last year was blamed in part to a homogenous board composed entirely of insiders. More recently, the board at Tokyo Electric Power Co. faced widespread anger over its response to the nuclear crisis at its Fukushima plant.
The utility's board is ruled by seniority and filled with insiders, Allen said.
"It's slightly baffling that there is not more of a sense of urgency within the political and regulatory leadership in Japan and the corporate leadership to really address some of the issue," he said.
Associated Press writer Bob Barr in London contributed.