If you haven’t been paying attention to the Olympus drama that became public in late October when Olympus’ board fired former CEO Michael Woodford you might want to stay tuned in because this case is going to shine a light on governance problems in Japan’s corporate world and possibly on the insidious influence of the yakuza on corporate Japan.  This mess became public because newly-appointed CEO Woodford demanded answers to why the venerable camera-maker had paid historic fees to little known M&A consultants.  Merger and acquisition advisers typically receive a fee of 1 percent to 2 percent of a deal’s value but Olympus had paid more than one-third of one acquisition’s $2.2 billion price tag.

Mr. Woodford left Japan immediately after being fired but his luggage contained a lot of evidence that he has turned over to British, American and Japanese police who are all investigating.  Mr. Woodford says it is not safe for him to return to Japan to testify.  Jake Adelstein writes that Mr. Woodford, as a foreigner, just didn’t get it – that “his promotion involved an implicit exchange of power for shutting up about things no one wants to talk about.”  The New York Times reports that Olympus is considering legal action against Mr. Woodford for “bringing confusion to the company’s management and damaging its share price.”

An important lesson for those involved in business in Japan is the very astute observation by the late Igari Toshiro (reported by Adelstein), former prosecutor turned anti-yakuza crusader that:

“one of the first signs that a company has been infiltrated by anti-social forces is a sudden and totally new change in company direction–especially into areas like waste disposal, labor dispatch (temporary staffing), and real estate—all areas where anti-social forces (yakuza) have carved out a large niche for themselves.”