Shares in Japan's Olympus Corp jumped more than 15 percent in early trade Monday on persistent speculation that the disgraced maker of cameras and endoscopes may avoid delisting despite the accounting scandal engulfing it.

Japanese police, prosecutors and the securities watchdog are investigating Olympus after the 92-year-old firm admitted this month that it had hid investment losses for decades, disguising some of them as merger and acquisition payments.

The scandal has raised the prospect of the company being delisted from the Tokyo stock exchange, but speculators who believe Olympus' core medical equipment business still has value have been buying shares on hopes that this won't happen.

Instead, they are betting that executives responsible for the scandal will bear the brunt of any punishment.

It's been over a month since the scandal emerged. There hasn't been good news and the outlook for the company is still unclear, but the stock sometimes rises on buying by those who hope for short-term gains, said Masayoshi Okamoto, head of dealing at Jujiya Securities.

I think fears of delisting are fading after foreign shareholders requested that the stock remain listed. The Tokyo Stock Exchange (TSE) might be sensitive to outside pressure from foreign shareholders, he added.

The scandal at the once-proud firm has rekindled concerns about lax corporate governance in Japan. It has also revived worries about links between companies and organised crime, as investigators probe possible involvement by yakuza gangsters.

A unit from the Tokyo Metropolitan Police Department's organised crime division has joined the investigation, a source familiar with the matter said Friday. But the source added that it was premature to say whether gangsters were involved.

Olympus has admitted to improperly accounting for part of $1.3 billion in M&A payments going back to 2006, although an independent panel commissioned by the firm to investigate the matter is still trying to get to the bottom of the issue.

A large share of these payments went to obscure Cayman Islands firms, making it difficult to trace the money.

Tokyo prosecutors, who Japanese media said had questioned Olympus ex-president Hisashi Mori on a voluntary basis on Friday, are expected soon to question the firm's former president, Tsuyoshi Kikukawa, and internal auditor Hideo Yamada over their role in the scandal.

The Hong Kong-based Asian Corporate Governance Association, whose members include institutional investors that collectively manage assets of more than $10 trillion, urged the Tokyo exchange Friday not to delist Olympus.

Institutional investors, however, have been reducing their stakes as the investigation progresses.

The Tokyo exchange has placed Olympus on a watch list as a possible prelude to delisting. If the firm misses a December 14 deadline for filing its financial statements for the six-months to September, it will be automatically delisted.

Even if Olympus meets the deadline, the bourse can still delist the stock depending on the scale of its past financial misstatements or if the firm is found to have done business with organised crime syndicates.

Olympus shares were up 14 percent at 712 yen at 8:15 p.m. EST, off a high of 725 yen. The stock was the fourth most heavily traded by turnover.

(Writing by Linda Sieg; Editing by Mark Bendeich)

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