Olympus chief executive forced to quit over alleged illegal drug purchase

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Olympus head Stefan Kaufmann has been pushed out over allegations that he purchased illegal drugs, the Japanese medical device maker said on Monday, in a stunning exit for one of Japan’s few foreign chief executives.

Shares in the company, famous for its cameras before it sold off that division in 2021, declined 5 per cent in Tokyo on the news of Kaufmann’s resignation, only 18 months after he took the top job.

The company said Kaufmann had stepped down following an internal inquiry, which was launched after Olympus received an allegation that the chief executive “had purchased illegal drugs”.

“Based on the results of the investigation, the Board of Directors unanimously determined that Mr Stefan Kaufmann likely engaged in behaviours that were inconsistent with our Global Code of Conduct, Our Core Values, and our corporate culture,” it said.

Kaufmann, a German national, did not respond to a request for comment.

The 56-year-old company veteran, who rose through the ranks of Olympus over two decades, had not been detained by police at the time of his resignation, according to people familiar with the matter. He is still in Japan, they added.

Olympus declined to provide further details, including whether the drugs were for recreational use or medical drugs that cannot be imported into Japan. It cited an ongoing police investigation into the allegations.

In 2015, Julie Hamp, a Toyota executive and US citizen, was detained by Japanese police for allegedly attempting to import oxycodone, a powerful painkiller that requires a prescription, from the US. After being detained for 20 days, she was released without charge.

Olympus has fired a foreign CEO before. Michael Woodford from the UK was sacked shortly after his appointment in 2011, after he lifted the lid on a $1.7bn accounting scandal that rocked corporate Japan.

Japan has had a small but high-profile flow of foreign executives over the years, not always resulting in resounding success.

Brazilian-born Carlos Ghosn, the former chair of Nissan, fled Japan covertly in 2019 after facing financial misconduct charges that he continues to deny.

Olympus was targeted by US activist investor ValueAct in a campaign that pushed it to accept three foreign board directors in 2019.

All options to appoint the next CEO are under consideration, the company said, as chair Yasuo Takeuchi fills in during the interim.

Kaufmann took charge in April last year touting a “new Olympus” with transformed governance and a sharpened pivot to a business selling medical devices such as endoscopes.

Since Kaufmann took over, the company’s shares have risen but by less than half of the Topix benchmark’s 31 per cent jump over the same period.