Olympus (7733.T), a camera maker and the world's biggest manufacturer of endoscopes used for internal medical examinations, sacked its British CEO after he queried staggeringly high advisory fees paid in past acquisitions. In the weeks that followed, regulators uncovered a $1.7 billion accounting fraud stretching back over more than a decade.

The scandal, one of the worst to stain Japanese business in decades, was expected to shake up a deep-rooted local culture where critics say corporate governance is lax.

At an extraordinary meeting on Friday, which some hope will draw a line under the scandal, shareholders led by big Japanese institutions, the company's lenders, suppliers and customers are expected to approve new management put forward by the current, disgraced, board, all 11 of whom are standing down.

ISS Proxy Advisory Services has urged investors to reject Olympus' restated accounts and vote against two men nominated to lead the business out of disgrace.

The company's new president is likely to be Hiroyuki Sasa, an Olympus insider. The nominated chairman is Yasuyuki Kimoto, closely tied to Sumitomo Mitsui Financial Group (SMFG) (8316.T), a major creditor. Woodford says neither is up to the task of returning Olympus to financial health. The company has forecast a $410 million loss for the year just ended.

Sasa, currently director of medical systems, "has not run a large operational business, the Americas or Europe," Woodford said. "Olympus has 40,000 employees, he was running the marketing department."

"They are putting a banker in as chairman who will represent the interests of the bank. What does he know about healthcare?" said Woodford, seated on a plush sofa with copies of his just-published Japanese book, "Terminated", stacked neatly on a table behind him.

Olympus has said Sasa's choice reflected confidence in his calm temperament and ability to execute on company objectives, noting also that the new top managers were fresh faces with no ties to the scandal.

ONE QUESTION

Resigned to seeing the new board approved by the company's powerful bankers and backers, Woodford, who said he feared for his life during the early days of the scandal, will pose a single pre-submitted question to those who fired him, asking whether they stick by his "gross misconduct" as the reason for his dismissal.

As Woodford is suing the company in a British tribunal for 10 years worth of salary, the company's reply could set off a lengthy legal joust.

Woodford, who in January gave up a bid to get his job back, plans to arrive at the start of the EGM, at 8.30 a.m. (2330 GMT Thursday), accompanied by confidante and interpreter Waku Miller and Koji Miyata, a supporter and former Olympus board member. "I will go and say what I want to say. I have taken very good council," he explained.

Olympus, which normally has a few dozen shareholders attend its meetings, has booked a large hotel function room, expecting several thousand people, said spokesman Osamu Kobayashi, and will lay on extra drinks and security.

Woodford, who owns 10,000 Olympus shares, worth around $150,000, does not expect to be alone in confronting past and incoming board members. He reckons anything above 20 percent of stockholders opposing the nominee-board would send a strong message of investor disapproval.

"I think en masse you will see foreign shareholders voting against what's taking place," he predicted. "Overseas investors do not have confidence in the way the new constitution of the company is being formed."

THE AGENDA

Shareholders will be updated on the scandal, and be asked to approve results restated in December after an external panel revealed the firm hid investment losses off its books for 13 years. The company will also explain what it's doing to rebuild. The final agenda item is the vote on a new board and four auditors.

Over the months, seven people have been arrested, including former Olympus chairman Tsuyoshi Kikukawa, former executive vice president Hisashi Mori and former auditor Hideo Yamada. Under criminal charges, the executives could face up to 10 years in jail, or a fine of up to 10 million yen, lawyers have said. Olympus itself is suing for mismanagement five of its eight directors, including current president, Shuichi Takayama.

High on the new board's to-do list will be whether to seek a cash injection, possibly through a capital tie-up in the company's medical business, with Sony Corp (6758.T), Panasonic Corp (6752.T) and Fujifilm (4901.T) among potential partners cited in media reports.

As of end-December, Olympus had an equity ratio of 4.4 percent, compared with about 30 percent for its rivals, and less than a quarter of what is seen as a healthy cut-off, implying it needs to raise about 150 billion yen in fresh equity. Olympus shares slumped around 80 percent as the fraud unfolded in October, but have since rallied and are now around half the pre-scandal level, valuing the company at $4.1 billion.

"Olympus needs to strengthen its capital, and there's the balance sheet issue," said Nanako Imazu, an analyst at CLSA Asia Pacific Markets in Tokyo. "If Mr. Kimoto, coming from his background, becomes chairman, I think there'll be some strengthening of capital," she added, though the big decisions are likely to be held over while criminal and regulatory investigations are ongoing.

Woodford opposes bringing in new investors, saying Olympus should instead raise cash by selling the cross-shareholdings that bind it to its suppliers, customers and lenders.

Big lenders such as SMFG and Mitsubishi UFJ Financial Group (MUFG) (8306.T) are often key investors in Japanese companies, with major stock and debt

• A Permanent Economic Emergency