Japan prosecutors raided Olympus Corporation.

The Wall Street Journal - Japanese prosecutors have raided the headquarters of Olympus Corporation as part of an investigation into the cover-up of huge losses at the camera and medical equipment maker.

Japanese prosecutors confirmed the raid, which was also broadcast on national television on Wednesday. A trail of dark-suited officials were shown marching solemnly into the downtown Tokyo office building.

Olympus said it would fully cooperate with the investigation by prosecutors, police and financial authorities.

"We apologise deeply again for the great troubles and worries we have caused our shareholders, investors, customers and others," it said in a statement.

NHK TV said the suburban home of former Olympus president Tsuyoshi Kikukawa, suspected of helping to orchestrate the cover-up, was also raided.

The deception at Olympus dates back to the 1990s and involved an elaborate scheme to hide 117.7 billion yen ($1.5 billion) in investment losses. It came to light in October, when then president Michael Woodford blew the whistle on what he thought was strange and excessive spending.

Woodford, a Briton, had been a rare foreigner to head a major Japanese company.

The scandal has raised serious questions about corporate governance in Japan, and whether big companies are complying with global standards.

Woodford was fired after he confronted the company's board of directors with his doubts. In recent weeks, he has been trying to stage a comeback to the top, by appealing to shareholders, employees and others that his return would help clean up Olympus.

Woodford had questioned exorbitant fees for advice on the acquisition of British medical equipment maker Gyrus Group and other expensive acquisitions in 2008.

Woodford is demanding the resignation of the entire board, including president Shuichi Takayama, who replaced him and initially declared in a news conference that the spending had been legitimate.

The battle over who will lead Olympus and its 40,000 employees could come to a head at the next shareholders' meeting. A date has not been set.

The new Olympus management has expressed a willingness to consider alliances in an effort to get its finances back in order.

Olympus delayed reporting earnings because of the accounting irregularities, but met the stock exchange's deadline earlier this month, averting automatic removal from the market.

The company could still be delisted if the criminal investigation discloses serious misbehaviour.

In the past, erring executives in Japan have rarely been sent to jail for shady bookkeeping.

Covering up for investments that went sour after the 1980s "bubble" economy burst was so widespread in Japan that a special term - "tobashi" - describes the practice.

Olympus stock plunged when the scandal broke but has recouped some of those losses in recent weeks. On Wednesday it was trading down 1.5 per cent at 1,049 yen.