Scandal-hit Olympus said on Tuesday it had found that funds related to its acquisition of British medical equipment maker Gyrus and of three domestic firms were used to cover losses on securities investments dating back to the 1990s.

The revelation by the Japanese maker of endoscopes and cameras was the biggest disclosure about the mysterious deals, which are at the center of a high-profile governance scandal that followed dismissal of its British CEO Michael Woodford.

The announcement sent its shares down 29 percent to a 16-year low on Tuesday. The company has lost 70 percent of its value since it fired ex-CEO turned whistleblower Woodford.

The 92-year-old company said in a statement that its new president, Shuichi Takayama, would hold a news conference at 12:30 p.m. (10:30 p.m. ET) to elaborate on the matter, which it said had come to light as part of its cooperation with a third-party panel set up to investigate the transactions.

Through this process (of the third-party investigation), we found that from the 1990s the posting of losses on securities investments had been deferred, the company said in a statement.

The company said it had funneled money related to the acquisitions through various funds and other measures to defer posting the losses.

A spokesman for the Tokyo Stock Exchange said the bourse needed more information before deciding whether to put Olympus shares under supervision, a step toward possible delisting.

The TSE spokesman said it needed to examine the size of the deferred losses and whether they had an impact on shareholders' investment decisions before taking any further action.

This is very serious. Olympus admitted it has made false entries to cover its losses for 20 years. All people involved in this over 20 years would be responsible, said Ryosuke Okazaki, chief investment officer at ITC Investment Partners. There is a serious danger that Olympus shares will be delisted. The future of the company is extremely dark.

The firm has come under increasing pressure to disclose more information to address shareholder concerns in an escalating scandal that has prompted law enforcement agencies in Japan and the United States to investigate.

Shares in Olympus opened untraded due to a glut of sell orders after the announcement.

The company had suddenly fired Woodford on October 14, saying he failed to understand the company's management style or Japanese culture.

But Woodford said he was forced out for questioning $687 million for advice on the $2 billion Gyrus acquisition in 2008, the biggest fee in M&A history and larger than its profit forecast of 50 billion yen ($641 million) for the current financial year.

Woodford also questioned the acquisitions of three small Japanese firms whose value had been largely written off after the purchases.

Prodded by institutional shareholders, Olympus has named six men, including a former Japanese supreme court justice, to investigate the past M&A deals in which it has been accused of making unjustifiably large payments.

(Additional reporting by Antoni Slodkowski: Writing by Linda Sieg; Editing by Michael Watson, Edmund Klamann and Miyoung Kim)

Japan Investment