Banker in Olympus scandal steps into public view

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A Japanese banker who is a key figure in the Olympus accounting fraud came into public view for the first time since the scandal broke, appearing on Friday at his divorce hearing in a Florida court.

Hajime 'Jim' Sagawa ran a U.S. investment firm that earned a massive $687 million fee for advising Olympus in a 2008 acquisition deal that ranks as the largest advisory payment in history.

Olympus has admitted the deal along with others was part of a 13-year scheme to cover up $1.7 billion in losses in an accounting fraud that has caused the company's stock market value to drop around 40 per cent since October.

The scandal, involving inflated advisory fees and prices in acquisition deals, has triggered investigations by law enforcement agencies in the United States, Japan and Britain.

An outside investigation commissioned by Olympus found the scheme was hatched by several key executives and aimed to hide losses from investors, but law-enforcement agencies are continuing their investigations.

The whereabouts of Sagawa, a former PaineWebber banker, were unknown until Reuters located him when he attended the divorce hearing in a state court in Delray Beach, Florida.

When asked about the Olympus case, he responded with a terse 'no comment'. Pressed further, he waved his hand and said 'it's rude' to keep asking.

Dressed in a blue sport coat and gray slacks, Sagawa emerged with his ex-wife from a courtroom after a final divorce hearing.

The couple walked briskly to a parking garage after being asked again to comment on the scandal that has rocked Olympus and left the Japanese medical equipment and camera maker in need of a capital infusion and at risk of being delisted from the Tokyo Stock Exchange.

Sagawa ran the Axes America brokerage firm involved in Olympus' $2 billion takeover of British medical instruments company Gyrus.

The Gyrus fee was among several vehicles used by Olympus to disguise securities losses.

Axes America later allocated a large share of its $687 million advisory fee payment to Cayman-based AXAM Investments. That company was later struck off a company registry in the Cayman Islands.

Axes is also linked to another Japanese banker, Akio Nakagawa, whom Reuters located in Hong Kong in late November after he went on the run when the scandal was uncovered. He also declined to comment.

Olympus is suing its current president and 18 other past and present company officials over the scandal.

Until reports of the fraud emerged, Sagawa lived in a luxury waterfront house in Boca Raton, Florida, but was unable to be located afterward.

His ex-wife has repeatedly defended his involvement with Olympus and said she did not know where he was.

Sagawa has not responded to repeated emails and phone calls seeking more detail on Axes America's role in the scandal.

The Sagawas filed for divorce in October, days after the Olympus accounting fraud surfaced when the company's former chief executive, Michael Woodford, blew the whistle on the Axes America advisory fee and other deals.

In a divorce petition filed in October, the Sagawas, who married in 1979 in Tokyo, cited 'irreconcilable differences'.

The couple listed more than $11 million in combined assets and Sagawa reported a monthly income of $2,500 with $1,800 coming from social security and $700 from interest and dividend payments.

According to their settlement agreement, Ellen Sagawa will receive nearly $9.9 million in assets, including their Boca Raton home valued at $2.5 million. Also among the assets are $6.7 million held in a savings account.

Sagawa will keep nearly $1.5 million in assets that include $1.3 million in several retirement plans, $100,000 in a savings account and $100,000 in a brokerage account.