he scandal has rekindled criticism of Japanese corporate governance and authorities worry about the fallout on other companies.

"I fear this is inviting a major loss of confidence in Japan's capital markets," said ruling Democratic Party lawmaker Shinsuke Amiya, who is a member of a new party task force looking into possible legal changes as well as perhaps revising listing requirements and boosting the number of securities watchdog inspectors.

Investor pressure has mounted for a change of management.

UK fund manager Baillie Gifford & Co, which says it holds more than 4 percent of Olympus, called on the firm to reinstate Woodford, who had only been in the CEO's job for two weeks.

"What Olympus needs now is a thorough clean-up and we believe Michael Woodford is the best man for the job," Baillie Gifford partner and its head of developed Asia equities, Elaine Morrison, said in a statement.

"The current management of Olympus has been discredited