:00:16. > :00:20.Israel. Thanks for joining us on World
:00:20. > :00:26.Business Report. The former president of the Japanese camera
:00:26. > :00:30.maker Olympus is arrested with two other former executives suspected
:00:30. > :00:35.of a $1.7 billion fraud. General Motors is expected to
:00:35. > :00:40.report strong results but the road ahead is less rosy for its European
:00:40. > :00:50.Opel unit. The Australian airline Qantas said
:00:50. > :00:52.
:00:52. > :00:56.profits fell over 80% to two strikes and fuel costs.
:00:56. > :01:02.Japanese police have arrested the former President of Olympus.
:01:02. > :01:06.Tsuyoshi Kikukawa is being questioned about his role in one of
:01:06. > :01:12.the biggest financial scandals of the country. He is suspected of
:01:12. > :01:15.being part of a long-term cover-up of losses amounting to $1.7 billion.
:01:15. > :01:21.They are also investigating other form as Olympus invest --
:01:21. > :01:29.executives. Our correspondent has more. Bring us up to date and
:01:29. > :01:33.reminders of the background. This story became public in October.
:01:33. > :01:37.Olympus's chief executive blew the whistle of one of the biggest
:01:37. > :01:42.accounting scandals in Japanese corporate history. He said he had
:01:42. > :01:46.been fired for questioning internally some unusual advisory
:01:46. > :01:51.payments and acquisitions. Olympus subsequently admitted it had been
:01:51. > :01:58.hiding investment losses. More than $1.5 million worth. Dating back
:01:58. > :02:06.decades. Regulators, police and prosecutors have been investigating.
:02:06. > :02:10.Prosecutors have arrested three former executives. The former
:02:10. > :02:15.chairman and president Tsuyoshi Kikukawa, a executive vice-
:02:15. > :02:20.president, and the company's former auditor. They were blamed by
:02:20. > :02:25.Olympus in a report by any independent panel. They blame for
:02:25. > :02:32.orchestrating the cover-up. there a feeling that we have got
:02:32. > :02:36.this situation now but we could have gotten their earlier?
:02:36. > :02:40.Certainly there has been concern in Japan and elsewhere that what has
:02:40. > :02:45.happened at Olympus, is enormous hall in the balance sheets, could
:02:45. > :02:50.remain hidden so long, it says worried things about the state of
:02:50. > :02:55.corporate governance in Japan. It is too lax. There are not enough
:02:55. > :02:59.independent directors. Not enough oversight. People are looking at
:02:59. > :03:04.what is happening and the say this is a sign that the rule of law is
:03:04. > :03:12.going to play a proper role in Japanese companies and that what is
:03:12. > :03:16.happening at Olympus is a part of that.
:03:16. > :03:20.To know Motors is expected to show a strong performance for the past
:03:20. > :03:25.three months, but not as strong as earlier in the year. It was doing
:03:25. > :03:30.you well in America and China, but the European arm is struggling.
:03:30. > :03:40.GM's Opel business is expected to lose $300 million in the last
:03:40. > :03:42.
:03:42. > :03:49.quarter. It has shut plants and In America, General Motors has
:03:49. > :03:54.turned a corner. Sales jumped 13% in the US in 2011. The company is
:03:55. > :04:02.now profitable. The US has been great. An increase in sales and
:04:02. > :04:06.market share and profitability. All things that you want to have.
:04:06. > :04:13.in Europe, they are struggling. The manufacturer has lost money for
:04:13. > :04:18.well over a decade. Demand has slumped with the eurozone crisis.
:04:18. > :04:24.It everyone knows Opel is a problem, they say. Workers, government and
:04:24. > :04:31.shareholders. The problem is the cost per unit is to hire. It
:04:31. > :04:36.creates a dilemma in terms of finding the right solution. While
:04:36. > :04:40.Opel in Europe will require more restructuring, GM at home was a
:04:40. > :04:46.deal with a pension fund that is massively underfunded. The new
:04:46. > :04:52.smaller cars, their increasingly popular, are not as profitable.
:04:52. > :04:55.it was a large pick-up truck or best CV, it can makes two was three
:04:55. > :05:01.times the profit of a smaller car. It is always been a struggle for
:05:01. > :05:07.the US car companies. GM is done a better job but that in the last few
:05:07. > :05:13.years and has had some success, but the impact has been worse on their
:05:13. > :05:17.profitability. General Motors is a global player. It is doing well at
:05:17. > :05:22.home in the markets like China. But it is struggling in South America
:05:22. > :05:26.end in Europe. Some of the problems may be economic but others are to
:05:26. > :05:32.do with the business. Those are the issues that it must deal with
:05:32. > :05:41.quickly. Let's talk about the airline
:05:41. > :05:45.industry. 500 jobs may be going at Qantas. Our correspondent has more.
:05:45. > :05:53.Clearly some difficult times for Qantas. They have released their
:05:53. > :05:58.results and we may see job losses. That is right. Turbulent times, I
:05:58. > :06:04.should say. They announced these job losses today, 500 of them. They
:06:05. > :06:10.said profits were down 83%. All of that thanks to strikes and fuel
:06:10. > :06:15.costs. The strikes were last year, Qantas grounded its entire fleet.
:06:15. > :06:21.It was unprecedented. It they said it is going to close some
:06:21. > :06:27.international routes. The profits were hit by the industrial dispute.
:06:27. > :06:30.The strike cost them $200 million last year and they have been
:06:30. > :06:37.triggered by a restructuring plan that Qantas had announced which
:06:37. > :06:40.included a proposal to outsource some of its services. It is
:06:40. > :06:45.expected to result in a thousand job cuts in the Australian
:06:45. > :06:55.operations. Higher fuel prices were the other factor. It cost them
:06:55. > :06:55.
:06:56. > :07:01.these proffer losses. Qantas is not having a good time.
:07:01. > :07:06.The defence firm releases its preliminary annual figures on
:07:06. > :07:12.Thursday. It has taken a big hit because of cuts in defence spending
:07:12. > :07:17.in the UK and the USA. It has been trying to compensate by developing
:07:17. > :07:24.another market by arms sales in India. That has hit a snag. So what
:07:24. > :07:27.next? Recent months have been torrid.
:07:27. > :07:33.Combats like the UK scrapping of the reconnaissance plane have
:07:33. > :07:38.scrapped revenues. Over the past two years alone, they have had to
:07:38. > :07:42.low of 15,000 people from its 100,000 strong workforce. It hoped
:07:42. > :07:50.to new business would come from a drive into India. But in the recent
:07:50. > :07:54.race to win a big order, it lost the lead. They had a strategy that
:07:54. > :08:01.was widely lauded as making more trouble home markets partnership
:08:02. > :08:08.with larger companies. Nice defence in the US. So they would be an area
:08:08. > :08:13.of domestic growth. This has not gone according to plan. They were
:08:13. > :08:21.loss of forces ranged against them. Domestic interest did not want a UK
:08:21. > :08:25.firm dominating. They still have strong revenue streams. They supply
:08:25. > :08:30.Euro fighters to Saudi Arabia. It is taking a driving two countries
:08:30. > :08:34.eager to upgrade. But some worry whether it is plying back enough of
:08:34. > :08:42.its profits into developing next generation defence systems for the
:08:42. > :08:49.leading military powers. Electronics, cider, the potential
:08:49. > :08:55.that is offered by things that we don't necessarily feel and touch.
:08:55. > :09:01.It is very large. Let us hope that they can bring their shareholders
:09:01. > :09:05.on site. There is a degree of risk. The profits are floodlighting.
:09:05. > :09:09.Shareholders would like to see it strip out more costs. Over the
:09:09. > :09:15.coming year, they are expected to shed some of its least profitable
:09:15. > :09:22.operations. It is thought it could include the Fleet Support based in
:09:22. > :09:27.Portsmouth. Let me show you how the markets are
:09:27. > :09:37.faring in Asia. You may remember that we saw a six-month high for
:09:37. > :09:37.
:09:37. > :09:41.the Nikkei. It has come down from that as you can see. The issue of