Meanwhile, Sasa – who was appointed Olympus president last year – has warned that the imaging division will be under threat if the company fails to complete a restructure of its business in favour of mirrorless system cameras.

In a meeting with Japanese business analysts, details of which have appeared in the company’s annual report published today, Sasa said: ‘I was quite surprised when this [scandal] issue surfaced, and I feared Olympus itself may cease to exist.’

Sasa, then a manager in charge of marketing for the firm’s medical equipment business, added: ‘To reassure my subordinates after the issue surfaced, I reminded them of the company’s solid operating foundations exemplified by its endoscopes. There was no way this foundation would just disappear.’

During the meeting, Masahiro Nakanomyo, managing director at Barclays Securities Japan, voiced concern over the future of Olympus’s imaging business, which has made an operating loss for the past three years and is in the throes of a restructure as smartphones quash sales of low-end compact cameras worldwide.

‘Personally, I do not feel completely at rest with regard to the Imaging Business,’ he told the meeting.

Nakanomyo fears it will continue to make losses, despite the firm drastically cutting its sales volume targets.

While he believes there is no need for Olympus to pull out of imaging, he asked Sasa whether Olympus could ‘further reduce risks’.

Sasa replied: ‘Over the past year, we have evaluated all possible options. This issue was discussed in depth, and we received advice from outside directors before finally arriving at our decision.

‘However, as the operating environment changes, we will of course have to revaluate the path we have chosen, and we are thus prepared to take additional steps as necessitated by the conditions we face.

‘As you say, controlling risks, including those related to mirrorless cameras, will be an important task going forward.’

Mirrorless key to imaging survival

Sasa warned: ‘Moreover, if we are unable to complete the shift to mirrorless cameras, the very continuation of the Imaging Business will be threatened.’

Meanwhile, analysts have blamed themselves for not predicting the scandal before it was publicly exposed by its former CEO, turned whistleblower, Michael Woodford in October 2011.

Olympus was found to have used a complex web of financial transactions to cover up investment losses in its accounts dating back to the 1990s.

Toshiya Hari, a managing director at Goldman Sachs Japan, said: ‘We upgraded our rating on Olympus two days before Michael Woodford was removed from his position as president and CEO, and I remember becoming quite emotional after the incident surfaced.

‘At the same time, I blamed myself for my inability to catch on to the misrepresentation through disclosure materials which, while perhaps difficult, could not have been impossible to see.’

This is a view echoed by Nakanomyo who feels that Olympus’s deferment of past losses in its accounts ‘was partially due to the failure of us, as analysts, in performing our duties’.