ROUGH CUT (NO REPORTER NARRATION)<br/> <br />Japanese prosecutors swooped in on three former executives of Japan's disgraced Olympus Corp on Thursday (February 16) over their role in a the company's 1.7 billion U.S. dollar accounting fraud.<br/> <br />Prosecutors arrested ex-president Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former auditor Hideo Yamada on suspicion of violating the Financial Instruments and Exchange Law, officials said in a statement.<br/> <br />Also arrested were four others, including former bankers Akio Nakagawa and Nobumasa Yokoo, suspected of helping the executives hide huge investment losses through complex M&A deals.<br/> <br />In December, Yamada told reporters he felt a "heavy responsibility" for what had happened.<br/> <br />"I sincerely regret what I've done to both the shareholders and everyone in Japan," he had said.<br/> <br />The arrests come as investors focus on who will run the once-proud company when its management steps down at an April 20 shareholders meeting, and whether Olympus will seek a capital tie-up to fix its balance sheet.<br/> <br />Last year, the investigative panel found Kikukawa, Mori and Yamada had played leading roles in a 13-year scheme to hide the losses, and they are among 19 executives Olympus is suing over the scandal.<br/> <br />The scandal was exposed last October by then-chief executive Michael Woodford, a rare foreign CEO in Japan, who was sacked by the Olympus board after questioning dubious M&A deals that were later found to have been used to conceal the losses.
