CNN compares Olympus corporate scandal to The Girl with the Dragon Tattoo:

by Kevin Voigt for CNN

When the ex-CEO of Olympus talked about the saga that had befallen the Japanese company, the story he spun was less Harvard Business Review and more Pulp Fiction.

“I thought I was coming to run a health care company … and a consumer electronics company, and I find myself in this John Grisham novel,” Michael Woodford said last week at the Tokyo Foreign Correspondent’s Club. “Flying to New York to meet the FBI, references to organized crime, boardroom conflicts, character assassination — the whole thing has been a bizarre way to live.”

Perhaps Stieg Larsson is the closer comparison. The Olympus boardroom drama centers around $1.4 billion in losses that company officials now admit were hidden from shareholders and regulators through shady accounting. But much like Larsson’s “The Girl with the Dragon Tattoo” — the first of his blockbuster trilogy that centers around the work of the fictional investigative journal, Millennium, peering into financial misdoings — the Olympus conflict wouldn’t have surfaced were it not for the work of a little known magazine in Tokyo.

“The deeper and deeper we pursued this matter, we could find (there was) a big fraud happening,” said Shigeo Abe, publisher of FACTA, a Japanese publication whose investigative article in July questioned exorbitant fees Olympus — a maker of cameras and medical equipment — paid consultants and extravagant purchase prices of three small companies.

A five-page expose in FACTA — a small circulation magazine that has only nine staff — on July 20 raised questions over advisory fees of $687 million paid in 2008 for the purchase of Gyrus, a UK medical instruments firm. The article also questioned the $773 million paid for three small Japanese companies — a face cream maker, a plastic container maker and a recycling business, each with fewer than 50 employees.

That article, and a subsequent follow-up in September that alluded to possible Japanese mafia involvement, sparked a drama that would find Woodford and three other top Olympus executives out of a job, their company losing billions of dollars in share value. And Olympus — a venerable company emblematic of Japan Inc.’s phoenix-like rise from the ashes of World War II — now faces the possibility of de-listing from the Tokyo Stock Exchange. The alleged accounting tricks mirror the shenanigans of “zombie corporations” that littered the Japanese financial landscape in the post-bubble 1990s.

The story continues here.

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