The latest revelation about Japanese camera maker Olympus is that they lost most of their money in what looks like a deliberately stupid stock buy back program.

On November 8 it was revealed that Olympus has been almost broke since the late 1990s, and was cooking their accounting books.  Now we have an explanation of how they finally lost most of their money.

The book cooking was just the beginning.  In 2008 Olympus bought a British surgical equipment maker, Gyrus Group.

Olympus paid a stock brokerage company, located in the tax haven Caribbean island of Cayman, to handle the buyout.  That company was called AXAM.  Total payment to AXAM was 17 billion yen (about U.S.$220 million), in cash and Gyrus stocks.

In 2010, Olympus bought back the stock for a total of 60 billion yen (about U.S.$770 million)!  AXAM closed up shop three months later!

Talk about corporate incompetence, Olympus officials violated the golden rule of investing: Buy low, sell high.  But was it incompetence or a conspiracy?  It’s very suspicious that Olympus used a broker in a known tax haven country, who then closed up shop after Olympus bought back the Gyrus stocks, at grossly inflated prices.

To add to the conspiracy theory, it has just been revealed by NHK in Japan, that Olympus fired its independent accounting auditors when they began to question the company’s accounting books.

In 2009 the independent auditors questioned Olympus officials’ buyouts of three Japanese companies between 2006 and 2008.  All the companies were considered bad investments.  To make it more questionable, the auditors pointed out that Olympus had a yearly revenue of 2 billion yen (about U.S.$30 million), at most.  The three Japanese companies cost Olympus more than 73 billion yen (about U.S.$940 million)!

The Japanese Securities and Exchange Surveillance Commission claim it will investigate the Olympus scandal.