Even as the FBI investigates exorbitant advisory fees that the Japanese company Olympus paid to a firm with links to the Cayman Islands, a second set of deals is drawing scrutiny in Japan. These other deals, which caused Olympus to lose hundreds of millions of dollars, involved an enterprising ex-Nomura banker and his well-connected older brother, whose roles have not yet received much public attention. The former banker, Nobumasa Yokoo, runs a consulting firm that Olympus hired to advise it on acquisitions. Among other deals, Yokoo directed hundreds of millions of Olympus’s dollars into buying three money-losing start-up companies — with which he himself had been involved as an investor or executive — only to have Olympus quickly write off most of their value. His older brother, Akinobu Yokoo, headed an investment unit that steered Olympus’s money into various other companies that had little to do with the business of making medical imaging equipment and digital cameras. A write-down of those investments helped plunge Olympus into the red in the fiscal year that ended in March 2009. It is unclear how the Yokoo brothers became so involved in Olympus’s acquisition strategy. But their roles are evident from an examination of publicly available company filings and reports by credit ratings companies, as well as financial documents provided by Olympus’s recently ousted chief executive, Michael Woodford. Documents most clearly link the younger Yokoo brother with at least three of the companies he later advised Olympus to acquire between 2006 and 2008 for a total of $773mn. Those companies — Humalabo, a maker of face creams; News Chef, a manufacturer of microwavable cookware; and Altis, a medical waste recycler — were relatively new and had never made money, credit research reports show. Olympus wrote off three-quarters of that total investment within a year of completing the deals. Olympus says it has done nothing wrong other than making some business bets that turned sour. Nobumasa Yokoo could not be located for questions, while Akinobu Yokoo’s current employer would not make him available for comment. So far, Japanese authorities have not indicated they are investigating the deals involving Nobumasa Yokoo, and neither brother has been accused of any wrongdoing. Global Company. Nobumasa Yokoo’s part of the story traces as far back as 1998, to his days at the Japanese financial powerhouse Nomura. According to company records at the time, Yokoo — who had also spent time on Wall Street at Wasserstein Perella — was head of Nomura’s prestigious Shinjuku Nomura Building branch. There, he dealt with some of the firm’s top clients, including Olympus. But in June of that year, he and many others at the firm chose to leave after a scandal involving payoffs to Japan’s organized crime gangs led to resignations, and later arrests, of top executives. Yokoo was not implicated in the scandal. But he left, telling the Nikkei business daily at the time that he wished “to be able to cook the rice I live on.” Shortly afterward, Yokoo founded Global Company, a management consulting firm, according to Global’s legal filings. Yokoo quickly established a lucrative working relationship with Olympus. At an Olympus board meeting in January 2000, the company decided to invest 30bn yen in a business investment fund called G.C. Venture Capital, which was to be overseen by Yokoo, according to an internal report sent to Olympus auditors in 2009. The Elder Yokoo. Also in 2000, Yokoo’s elder brother, Akinobu — a top executive at Nissho Iwai, a big industrial trading company — was named chief financial officer for ITX, a investment arm that Nissho Iwai set up in the same year. Nissho Iwai soon looked for outside investors in ITX, and Olympus acquired a small stake the same year, according to company announcements. In May 2002, the elder Yokoo was named ITX’s chief executive. Olympus then increased its purchases of ITX stock until it held a majority stake by 2004. In June 2005, the elder Yokoo stepped down from ITX to become an executive officer at Olympus, while another Olympus executive was made head of ITX. But during Mr. Yokoo’s tenure ITX was involved in acquisitions — including the 6 billion yen ($78 million) purchase of an e-commerce company — that ended up losing money over all. By 2008, with much of its Olympus investments flailing, ITX reported a 4 billion-yen loss. The younger brother’s firm, Global Company, made its crucial three advisory deals from 2006 to 2008. Documents show no evidence that Olympus carried out due diligence on the companies Global urged it to buy. [NY Times, 10/24/11]