The ousted former boss of Olympus who exposed a $1.7 billion cover-up scandal threatened court action Friday after the firm's choices for a new board were approved at a heated shareholders meeting.
Angry investors shouted and peppered management with questions about the scandal, as one shareholder proposed that the embattled firm's whistleblowing former chief Michael Woodford be reinstated, which was later rejected.
During the tense meeting in Tokyo, executives rebuffed the Briton's demand to know why he was sacked six months ago, shortly before exposing a scheme that saw huge losses moved off the firm's balance sheet.
The ensuing scandal led to the arrest of former top executives at the firm, including the president, and hammered Japan's corporate governance image.
"Shame on you," Woodford repeatedly told management as a majority of shareholders approved the new 11-member board.
He later told reporters he would take the matter to court "to make this meeting illegitimate because they failed to answer the questions" about Olympus' accounts.
A hearing had already been scheduled in Britain for the first week of May, Woodford added, later saying he was also considering legal action in Japan.
"There are still a lot of concerns about the legitimacy and integrity of Olympus' accounts. And there is absolutely no trust with these people," he said, referring to Olympus officials.
Woodford said they had rejected a "fantastic" Japanese businessman with international experience whom he and foreign investors recommended to lead the firm. "(But) they don't want a strong, opinionated Japanese," Woodford said of the unnamed executive.
However the firm's shares jumped 6.36 percent on the board change to end at 1,280 yen on Friday, several months after the camera and medical equipment maker narrowly avoided a delisting from Tokyo's bourse.
Ri Hosoda, a shareholder and former employee, said he voted against the new board "because Michael was ousted", adding he "should be commended for what he has done."
Reiichi Goto, 62, said he and other investors cared more about the firm's shares, which have lost about half their value since the scandal broke in October, adding that he wanted the new board "to rebuild the company."
With the bulk of Olympus shares held by large Japanese institutional investors, who are typically unwilling to rock the corporate boat, the board had been expected to be approved.
But the nominees sparked anger among some foreign investors who argued their connections to major Japanese banks -- also Olympus creditors -- was a conflict of interest, while they also had little experience running the company.
The vote saw among others Yasuyuki Kimoto, a former senior managing director of Sumitomo Mitsui Banking, elected chairman and Hideaki Fujizuka, a former executive officer of Bank of Tokyo-Mitsubishi UFJ, become a director.
Hiroyuki Sasa, a 30-year Olympus veteran, was elected president, saying on Friday that his mission was to restore its "destroyed brand image" and boost public confidence "as soon as possible."
"To achieve this, I think we need a thorough overhaul of the management system so that a problem like this would never happen again," he said.
Olympus has rejected the criticism over its board picks, saying six of 11 board members are "completely independent" and "have no relations with banks".
On Friday, Olympus President Shuichi Takayama apologised to investors, bowing deeply with other directors, before they stepped down.
"We, the board members, deeply and sincerely apologise to shareholders for causing you great anxiety and troubles over the postponing of (reporting) the loss," Takayama said.
Olympus' re-stated financial statements showed it lost 33.08 billion yen ($405.5 million) in the nine months to December as it accounts for the losses.
In March the company and three former senior executives -- including ex-president Tsuyoshi Kikukawa -- were charged over their role in the cover-up.
If found guilty, the firm faces up to 700 million yen ($8.7 million) in fines, while the executives each face up to 10 million yen in fines and a decade in prison.
The firm initially denied allegations its had used past acquisition deals and outsized consultant fees to move huge losses dating back to the 1990s off its balance sheet, but eventually admitted wrongdoing.