Mark Willacy reported this story on Monday, October 24, 2011 08:17:00

TONY EASTLEY: A billion-dollar scandal has shaken one of Japan's blue chip companies with claims that huge amounts of money were somehow shifted to the Japanese mafia.



The recently sacked CEO of camera and optical equipment manufacturer, Olympus, alleges that more than one billion dollars in unjustified payments were made to obscure financial advisors.



The scandal has sent Olympus's share price into free fall and has the former CEO fearing for his safety.



Correspondent Mark Willacy reports from Tokyo.



MARK WILLACY: He was the first non-Japanese to be appointed to run Olympus in its 92-year history - a manager who'd turned the companies lagging European operation into the source of nearly half its worldwide profits.



But Michael Woodford has gone from CEO of one of Japan's most revered companies to a man almost in hiding.



MICHAEL WOODFORD: I've been advised by contacts in Japan that I should take care of my safety. There is a potential for organised crime to be behind some of this.



MARK WILLACY: So why does Michael Woodford think he needs to take care of his safety?



Well, 10 days ago the Briton was abruptly sacked as Olympus CEO at a board meeting. He was reportedly told by a disdainful Japanese colleague to go 'catch a bus to the airport'.



Mr Woodford believes he was ousted because he raised concerns about a series of acquisitions made by Olympus - acquisitions that involved $1.3 billion in what he says are unjustified payments to advisors - money he fears has been funnelled to criminals.



MICHAEL WOODFORD: Whether there is forces behind it because these transactions are so extraordinary is a fundamental concern of mine because again, if we get into the specific of the transactions to anyone who has looked at them, you are looking at amounts of approaching $1.5 billion which are pretty inexplicable.



MARK WILLACY: One Japanese magazine has speculated that these deals could have had the involvement of what it calls 'anti-social forces' - a term here in Japan for the yakuza or the mafia.



In one deal alone, Olympus paid nearly $700 million to an obscure financial advisor - more than a third of the sale price of the firm it was purchasing.



For its part Olympus has denied any wrongdoing, saying it sacked its rising star CEO because of his failure to acclimatise to Japan's business culture. This is despite the company's chairman describing himself as extremely pleased with Mr Woodford's performance just two weeks before he was fired.



Michael Woodford has now left Japan, returning to the UK - taking his allegations to Scotland Yard.



MICHAEL WOODFORD: They are so extraordinary, these payments and they way they've been made. I just can't understand how that could have happened unless there was some type of issue behind them in relation to more sinister matters.



MARK WILLACY: Michael Woodford was once held up as an example of corporate Japan's once closed culture opening itself up to new ideas and vision from abroad.



But now, like Olympus' share price, that has disintegrated.



This is Mark Willacy in Tokyo for AM.