Tsuyoshi Kikukawa, the former chairperson at Olympus, alongside six others, have been arrested for allegedly violating the Financial Instruments and Exchange Act of Japan.
Out of the seven arrested, three were senior level executives at Olympus - one of the leading camera manufacturers in the world. All seven accused will now have to face a criminal investigation, according to newly confirmed reports.
The authorities raided the company's Tokyo headquarters, in addition to a number of other affiliated offices, in December last year. This was all following complaints about an attempt by Kikukawa and two others, who were accused of hiding the investment losses from the 1990s.
Ever since Michael Woodford, the first ever non-Japanese president of the company was fired in October last year, the company's stock dipped by almost 50 per cent. This was soon followed by Woodford raising questions, about Olympus' inflated takeover costs.
Kikukawa was serving the company as its chief executive for decade, before finally stepping down last year. The other two senior executives involved in the alleged fraud include Hideo Yamada and Hisashi Mori.
"We take the situation seriously. We will cooperate fully with investigators," Yoshiaki Yamada, a spokesman for Olympus, stated, as reported by Business Week.