For two decades, a pair of Japanese bankers toiled away in relative anonymity on Wall Street, hopping from firm to firm. Now the two — Hajime Sagawa and Akio Nakagawa — are at the center of a growing firestorm over a mysterious $687mn payout by Olympus, the Japanese medical equipment and camera company. The money has been described as a fee for advising Olympus on the 2008 takeover of a British company, the Gyrus Group. But the fee amount was more than 30 times the norm on Wall Street. And it went, in part, to a tiny unknown firm run by Sagawa and Nakagawa. The bulk of the fee later went to a Cayman Islands company that also had ties to at least one of the men. After the deal closed and the fees were paid, both firms closed up shop. During the last week, shareholders and analysts questioned why a public multinational company like Olympus would award such an outsize payment for advisory fees. According to securities lawyers and corporate governance experts, federal authorities will probably examine whether the steep fees point to deeper ties between Olympus and the bankers, or even kickbacks to Olympus officials involved in the deal. Olympus has said its payments were “appropriate.” On Friday, the company said it would set up an independent panel to examine its past merger payments — a week after the company fired its chief executive, who said he had questioned the eye-popping fee. The firing of Michael Woodford, and his subsequent accusation that he was forced out because he planned to expose the fees, has rocked the company. Its shares have fallen 50% since Oct. 14. Many analysts have suspended their outlook for Olympus, saying the company’s future had been thrown into disarray by the seriousness of the matter. Olympus has been trying to recover since losing almost 115bn yen ($1.5bn) during the 12 months ended March 31, 2009. At the time, the loss was widely attributed to the effects of the global financial crisis, but it has now been linked to a sharp write-down in the value of three companies acquired earlier that year. Woodford has raised questions about those acquisitions, saying Olympus paid $773mn for the three companies with no due diligence, and later wrote down 76% of their value. Sagawa and Nakagawa have not been accused of wrongdoing, and they have no apparent ties to the three other deals. [NY Times, 10/24/11]