Key Highlights

• Olympus investigated drug purchase allegations against Kaufmann, working with legal counsel and authorities.
• The board concluded Kaufmann’s actions conflicted with company values, prompting his resignation.
• Olympus shares plummeted 5.3%, with concerns over leadership continuity affecting investor confidence.

Tokyo Olympus CEO Stefan Kaufmann stepped down following drug allegations, resulting in a sharp decline in the company's stock. The Tokyo Stock Exchange reported a 5.3% drop on Monday after the announcement, marking the largest single-day dip in almost three months.

Kaufmann, a German national, was appointed last year to lead the company’s expansion in medical technology but has since resigned at the board’s request.

Olympus Responds Swiftly to Drug Allegations

On Monday, Olympus Corporation released a statement confirming that Stefan Kaufmann, its CEO since April of last year, resigned following accusations related to drug purchases. The company acted immediately upon receiving the allegations, conducting an internal investigation with legal counsel.

"Based on the results of the investigation, the Board of Directors unanimously determined that Mr. Stefan Kaufmann likely engaged in behaviors that were inconsistent with our global code of conduct, our core values, and our corporate culture,” Olympus said in a formal statement.

The company refrained from disclosing the origin of the allegations or details of the investigation. Kaufmann, a veteran of 20 years at Olympus, had been tasked with expanding its medical equipment business but resigned at the board's request as they assessed the findings of the investigation.

Kaufmann’s departure marked a setback for Olympus as it struggles to address this latest controversy while maintaining its business momentum.

Shareholders React as Stock Plummets 5.3%

In response to Kaufmann’s resignation, Olympus shares dropped 5.3% on Monday, as reported on the Tokyo Stock Exchange.

This sudden dip follows a broader climb for the company’s stock, which had risen over 31% since the start of the year, outperforming Japan’s Nikkei 225 index.

Olympus, a leading name in imaging and medical technology, is accustomed to dealing with reputation crises. Nevertheless, the drug allegations against its CEO triggered immediate concern over investor confidence and stock stability.

Market analysts noted that this abrupt drop in shares highlighted a pressing concern for shareholders, who are wary of possible regulatory implications and Olympus’s approach to corporate governance.

“The company is facing a significant test in leadership stability and in ensuring transparent communication with its stakeholders,” a Tokyo-based investment analyst noted.

Olympus’s Rocky History with Executive Scandals

Kaufmann’s resignation brings another chapter to Olympus’s troubled history with corporate governance issues.

In 2011, the company was embroiled in a major scandal after former CEO Michael Woodford exposed long-standing accounting fraud, leading to arrests and charges against several executives.

Although Kaufmann’s case is unrelated to financial misconduct, the drug allegations have put Olympus back in the public eye over corporate accountability.

With his departure, Olympus’s previous CEO, Yasuo Takeuchi, is stepping back into the role temporarily. Takeuchi was instrumental in restructuring Olympus in recent years and advancing its focus on healthcare and digital technologies.

As the company refocuses on leadership, Takeuchi’s return is seen as a stabilizing move for both employees and investors.

Final Notes

Stefan Kaufmann’s resignation due to drug allegations poses significant implications for Olympus, both in leadership and in market perception.

As Olympus seeks to stabilize in the wake of this incident, Takeuchi’s return signals an effort to reassure investors and recalibrate its corporate focus.

With Olympus shares in a downturn, the next steps taken by its board will be crucial in rebuilding confidence among investors and maintaining its reputation in Japan’s highly scrutinized corporate landscape.