Olympus’s share price fell more than 70% in the weeks immediately following exposure of accounting irregularities in October 2011.

The Japanese company says it has reached a ‘memorandum of understanding’ to settle the legal action which was launched on 14 November 2011 by holders of American Depository Receipts (ADRs).

The settlement figure of $2,603,500 (around £1.6m) is not yet finalised and will need to receive final court approval, Olympus said in a statement today.

The statement adds that the plaintiffs claimed they were ‘damaged by the drop in value of the ADRs as a result of the company’s admission of making false financial statements about its financial condition and income in order to defer the posting of losses’.

The lawsuit was led by Chaitanya Kadiyala and Kelly Sharkey and the settlement figure relates to all those who bought ADRs between 8 May 2007 and 7 November 2011.

Olympus says the payout will be treated as an ‘extraordinary loss’ in its accounts for the year ended 31 March 2014.

In April, it emerged that UK pension funds were among 68 parties suing Olympus for around £42 million following the £1.1 billion accounting cover-up revealed nearly two years ago.

Pension funds run by Lloyds TSB Group; HBOS; Pearson Group; Shell; Nationwide; and the Royal Borough of Kingston-upon-Thames were among corporate investors named in the lawsuit.

Earlier this month it emerged that Britain’s Serious Fraud Office (SFO) is to prosecute Olympus over the financial scandal that rocked the camera company.

The SFO launched its investigation after Olympus CEO-turned-whistleblower Michael Woodford submitted documents to its offices in London shortly after he was fired from his Japan-based job in October 2011.