The largest foreign investor in Japan's Olympus has warned the Tokyo Stock Exchange (TSE) against delisting the embattled camera and endoscope maker, saying that would risk "vast negative ramifications" for foreign investors in Japan.
South-eastern Asset Management, which owns about five percent of the 92-year-old company, said on Thursday the TSE was close to making an "enormous mistake" after threatening a delisting if Olympus failed to report earnings by December 14.
"While placing Olympus on the watch list is correct given the TSE listing requirements, the idea that they could further punish ... parties, when it is in their discretion not to ... will have vast negative ramifications for foreign investment into Japan," said Josh Shores, a principal at the fund manager.
Olympus, once one of Japan's most venerable companies, admitted on Tuesday that it had hidden losses on securities investments for two decades. Former chief executive Michael Woodford has alleged the company spent around $1.4 billion on obscure fees and deals since being ousted last month.
Olympus's stock has already crashed by 80 percent in just under a month, corporate governance in Japan has come under intense scrutiny from an international posse of enforcement agencies - and shareholders say they have suffered enough.
"How the regulators and the exchange responds will go a long way to determining what this means," Shores said. "The parties who are responsible for this, the past management teams and the board of directors, are the ones who need to be sanctioned and the good parts of Olympus need to be protected, for the good of the public, the staff, not to mention the shareholders."
Shareholders have long worried that Japanese authorities could take the company out of the public limelight in an effort to draw a line under one of the most embarrassing corporate scandals in recent Japanese history.
With an independent panel poring over its books, Olympus has already been forced to delay its November 14 earnings announcement.