The Tokyo bourse will keep the shares of Olympus listed despite a scandal that has tainted global confidence in Japanese corporate governance, the stock exchange said Friday. The Tokyo Stock Exchange (TSE) said it will instead designate the company's stock as "on alert" from Saturday, while slapping it with a fine of 10 million yen ($130,000) for damaging investor confidence.
Olympus has admitted that it used over-priced acquisitions and consultancy fees to hide losses it had made on earlier investments, and it had been threatened with de-listing, which could have crippled it financially.
"The inappropriate accounting practices had generally no effect on sales or operating profit," the TSE said in a statement. "The exchange did not consider that (the improper accounting) had distorted investors' judgement to the extent to which delisting should be imposed."
Olympus shares plunged after the scandal came to light in October, at one point down more than 80 percent, before recovering to 1,199 yen on Friday - still only about half their value beforehand.
Some market participants expressed concern that similar scandals could recur if a severe penalty was not imposed. "This is a question of what is acceptable behaviour for a TSE-listed company," David Baran, co-chief executive at Symphony Financial Partners, a Tokyo-based fund with $200 million under management, told Dow Jones Newswires.
"I don't understand why the TSE has to be the bailout mechanism for poor governance and poor due diligence on the part of the company and the investors."
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