Tokyo - Arabstoday
Japan\'s corporate governance system is not to blame for the huge accounting scandal at Olympus Corp, and foreign investors are unlikely to abandon Japanese firms, an official at the powerful business lobby Keidanren said yesterday. Shares of Olympus have dropped around 50 per cent since the scandal erupted and some experts say the case could dampen foreign investors\' willingness to invest in Japan. But Yasuhisa Abe, director of the Keidanren\'s business infrastructure bureau, said he was not worried because foreigners\' share of investment in Japanese stocks has been rising and investment decisions are made based on other factors. \"Investments are dependent on firms\' performance or the moves of the Japanese economy. I can assert that no one makes decisions on investments looking only at governance,\" he told Reuters. Olympus is at risk of being delisted over its $1.7 billion (Dh6.2 billion) accounting scandal, one of the biggest ever in Japan, which broke in October after its former British CEO Michael Woodford blew the whistle on expensive and questionable acquisitions. Law review The scandal has put the spotlight on a review of Japan\'s Corporate Law, on which a Justice Ministry advisory panel has been working for over a year. Panels in the ruling Democratic Party and main opposition Liberal Democratic Party are also discussing the topic of corporate governance. \"I do not think that there are any problems in terms of the [corporate governance] system. The issue really is about individual firms,\" Abe said. Abe said he understood the need to review the corporate law, but the process should not be linked to specific cases including Olympus, which is a member of the lobby. On Tuesday a report by an external panel that investigated the Olympus scandal urged legal action.