The former chief executive of Japan's disgraced Olympus Corp, Michael Woodford, launched a campaign on Thursday to oust the board of directors, reclaim his old job and install his own team to save the firm from a big accounting scandal.

Woodford, who blew the whistle on accounting tricks at Olympus after he was sacked in October, said he was putting together his own team of candidates for a new board and talking to shareholders about replacing the current top brass, hopefully by February.

But the Englishman, who was a rare foreign CEO in Japan, denied under questioning from reporters that he was also considering an option to lead an overseas buyout of the 92-year-old maker of cameras and medical equipment.

I am not trying to get involved to sell Olympus to an American healthcare group or an overseas healthcare group. I don't want to be a part of that, he said, conceding he had been approached by several parties and declined to speak to them.

I wouldn't be part of that. I don't see that being feasible or attractive ... I just want Olympus to have a board, which is trusted and respected, and get on with running the company. I am quite Japanese in that sense, he added.

Woodford, speaking in New York where this week he had met Federal Bureau of Investigations officials probing the Olympus scandal, said he had finally resigned from the existing Olympus board on Thursday in order to openly campaign for its removal.

He said had spoken to some existing shareholders about options for a reconstituted board, and hoped Olympus would call a shareholders meeting to elect new directors by February, though he had yet to draw up his own team of directors.

This won't be aggressive or hostile in any way, he said.

But Woodford and the existing board, led by Olympus President Shuichi Takayama, now face a battle to see who has more shareholder support, but the Englishman may face resistance from Japanese investors making up the bulk of the share register.

Some domestic shareholders believe he could have handled the affair less openly and aggressively. It's possible but I don't think many Japanese investors would like Woodford to take over Olympus wholly, said Nanako Imazu, an analyst at CLSA in Tokyo.

PRIVATE EQUITY INTEREST

Olympus has lost more than half its market value since firing Woodford on October 14, an event that prompted him to go public with concerns he said he had been raising internally over a string of dubious acquisition payments dating back five years.

Sacked as CEO, Woodford had remained a board director, however.

The company admitted last month to hiding investment losses from its investors for two decades and using some of $1.3 billion spent on questionable deals to aid in the cover-up.

The stock rose 5 percent after Woodford's comments, though the company still faces heavy writedowns and possible delisting from the Tokyo stock market, a humiliation that could put it under pressure to sell core assets.

Private equity funds see Olympus as a good potential opportunity for new investment in Japan and would be interested in either buying Olympus as a whole or its non-medical businesses, private-equity industry sources say.

Olympus's main business is diagnostic endoscopes, which are used to peer inside patients and detect cancer and other diseases. It enjoys a near-monopoly worldwide and is worth $2.6 billion in annual revenues.

I always felt that a buyout led by Woodford was a possible scenario. Woodford himself understands that Olympus' core business, especially in the area of endoscopes, is very strong, so it's likely that he may have received some kind of a back-up from investors to take a lead in a buyout, said Hideyuki Ishiguro, investment strategist at Okasan Securities.

WOODFORD ON A MISSION

Authorities in Japan, Britain and the United States are still trying to get to the bottom of the complex cover-up.

An investigative panel of experts, set up by Olympus after the scandal broke, is due to report its findings within days.

Some of Olympus's big cornerstone shareholders have cut their stakes in the company, joining an initial rush of selling that also left Wall Street bank, Goldman Sachs, a market-maker in the stock, with a large holding.

Goldman Sachs recently emerged with nearly 7 percent of the stock, currently worth more than $200 million, and said the holding was not strategic -- a development that could further erode shareholder support for the existing Olympus board, which wants to preside over the initial clean-up.

Nippon Life Insurance Co, previously Olympus's biggest shareholder, said last week it would continue to support Olympus, though it had cut its holding to 5.11 percent from 8.18 percent, according to a regulatory filing on November 17.

Big foreign investors, by contrast, have called for Woodford to come back and lead a clean-up of the company and want the current board to leave, but they have so failed to convene an urgent shareholder meeting to force the issue.

The biggest foreign shareholder, Southeastern Asset Management, with about 5 percent, has supported Woodford's call for a board overhaul. And UK fund manager Baillie Gifford & Co, with about 4 percent, wants him reinstated as CEO.

Woodford himself is clearly on a mission, and says he is digging deep into his own savings to fund his campaign to return to the helm of the company where he had spent three decades.

He told Reuters in an interview in New York that his legal bills were the biggest drain on his resources.

They (his law firms) are all being reasonable. They understand I am not a corporation. But nevertheless, if you don't have any income coming in, and you have school fees to pay ...it is a heavy burden, he said.

(Additional reporting by Michael Erman in NEW YORK and Junko Fujita, Chikafumi Hodo and Linda Sieg in TOKYO; Writing by Mark Bendeich; Editing by Linda Sieg)

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