By Isabel Reynolds and Mayumi Negishi
TOKYO (Reuters) - Olympus Corp acknowledged on Wednesday that it paid an unusually hefty $687 million fee to financial advisers when it acquired British medical equipment firm Gyrus, confirming claims by ousted CEO Michael Woodford that lie at the centre of a bitter dispute.
On Monday, senior executive Hisashi Mori told investors that the fee was less than half that amount, excluding payments made for the repurchase of preferred stock in Gyrus.
The Japanese company said in a news release it had paid the financial advisers $443 million to buy back preferred shares, but it did not name the financial advisers and said it had no knowledge of their whereabouts following the completion of the transaction.
Briton Woodford has said he was advised by PriceWaterhouse Cooper that a fee of 1 percent of the purchase price would normally be expected in such an acquisition, rising up to a maximum of 2 percent in exceptional circumstances. That would amount to between $20 million and $40 million.
The dispute between Woodford, who was fired last Friday, and other top Olympus management has sparked a plunge in the precision instrument and camera maker's share price and raised questions about corporate governance in Japan.
The shares tumbled for a fourth straight day on Wednesday and are now down about 45 percent since the camera and endoscope maker announced the dismissal.
The stock was down 4.3 percent at 1,356 yen, falling as much as 6.4 percent at one point and underperforming a flat electric machinery subindex .
Analysts at JP Morgan, Goldman Sachs and Citibank said on Tuesday that they were suspending their ratings on Olympus, due to share price volatility and uncertainty.
Woodford has also accused the Olympus board of failing to conduct due dilligence on the advisers for the Gyrus deal, AXES America and Cayman-island based AXAM Investments.
Woodford, a 30-year Olympus veteran, said he was fired for probing the massive payments to the advisers as well as what he says were excessive sums paid for three domestic acquisitions before he was appointed to the board. [ID:nL3E7LI2G1]
Olympus reiterated in its statement on Wednesday that he was dismissed because of a clash of management styles and said his demand that Chairman Tsuyoshi Kikukawa and Mori resign over corporate governance issues was only one example of how he acted without reference to others.
(Additional reporting by Tim Kelly; Editing by Edwina Gibbs)
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