On Monday November 28th, Olympus Corp., Japan's maker of cameras and medical equipment, issued an internal memo to tell employees about the business and corporate governance reforms that the company is undergoing. Incidentally, this memo was obtained by the international multimedia news agency Reuters (News - Alert), which was later confirmed by the company.

Based on this internal company memo, Reuters reported that Olympus has launched a review of its business structure, amid speculation that the 92-year-old company may have to sell assets in order to survive a massive accounting scandal. For that, the company is planning to reform its corporate governance, and is setting up separate teams to supervise the two reviews.

In this memo statement, president Shuichi Takayama said to the employees, “They will make clear the optimal business structure and the proper profit structure to promote the steady further development of our business.”

Olympus, under police investigation and at risk of losing its Tokyo stock market listing, is keen to protect its highly profitable endoscope business from the impact of the scandal, according to reporters Reiji Murai and Maki Shiraki.

“So far, there is no sign it has disrupted the company's core $2.6 billion diagnostic endoscope business, which enjoys a near-monopoly worldwide. But the unit is part of a group that is highly geared and is expected to make major write downs once its accounts are set straight,” wrote Murai and Shiraki.

A report in the Nikkei business newspaper indicates that Olympus recently offered its creditor banks a plan to cut its debt by about 260 billion yen ($3.3 billion) over the next three years, and might sell assets to do so, wrote Murai and Shiraki.

Interestingly, this scandal has raised alarms in Japan, prompting both ruling and opposition parties to look at possible reforms. As a result, based on a report in Asahi newspaper, Reuters wrote that the ruling Democratic Party is considering making it mandatory for large firms to appoint outside directors. A lawmaker from the main opposition Liberal Democratic Party said it should be made clearer that outside directors are independent from company interests.

Meanwhile, Japan's securities regulator, the Securities and Exchange Surveillance Commission (SESC), has launched an on-site probe of Olympus to uncover details of its loss cover-up scheme, the Nikkei reported on Tuesday, according to Reuters.