The Securities Exchange and Surveillance Commission (SESC) said it had requested criminal charges be filed by public prosecutors against individuals involved in dubious mergers and acquisitions used to hide losses in one of Japan's biggest corporate scandals.

The complaint against Olympus is for filing false financial statements for the financial years ending March 2007 and March 2008. Last December, the company filed five years worth of corrected earnings statements to account for the scandal.

Former prosecutor, now lawyer, Shin Ushijima said the fact that the SESC had filed the complaint probably meant that prosecutors had already agreed to prosecute.

"Most likely the company will accept the charge, because the company's main purpose is to recover as quick as possible, so they want to avoid any unnecessary conflict," he said.

Kyodo news reported last month that the SESC and Tokyo prosecutors had apparently determined they could make a case against the company.

The SESC named former Chairman Tsuyoshi Kikukawa, former executive Vice President Hisashi Mori and former auditor Hideo Yamada in the complaint, plus former bankers for the company Akio Nakagawa and Nobumasa Yokoo.

Tokyo prosecutors and the metropolitan police arrested these executives and bankers last month following their own investigations for hiding huge investment losses through complex takeover deals.

Olympus itself is suing for mismanagement five of its eight internal directors, including the current president, Shuichi Takayama.

The latest charges would not affect the company's current listing status, the Tokyo Stock Exchange said. In January, the exchange said Olympus could keep its listing but that it would be placed on a "security on alert" list of firms seen needing to urgently improve their internal management.

The maker of cameras and medical equipment has proposed a new board of directors as it tries to recover from the scandal, subject to approval at a shareholders' meeting next month.

The losses were exposed in October by Michael Woodford, who was sacked as chief executive by the Olympus board after querying the M&A deals.

Since then, Olympus has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s. The firm is under investigation by law enforcement agencies in Japan, Britain and the United States.

The restated accounts showed that net assets at the end of December had dwindled to 44 billion yen ($540 million) from a restated 225 billion yen in March 2007.

Last week, Olympus proposed a new board of directors for shareholder approval at a meeting on April 14. However, the line up fell short of demands from major foreign shareholders for fresh outside talent in key positions.

Olympus' share price fell as much as 83 percent after Woodford's revelations in October. It closed on Tuesday at 1,300 yen per share, down 48 percent, before the SESC statement.

"We take the commission's decision seriously and will continue our efforts to strengthen our corporate governance system," Olympus said in a statement referring to the SESC's complaints. ($1 = 81.41 yen)

(Additional reporting by James Topham and Chris Gallagher; Editing by Edwina Gibbs and Neil Fullick)

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