Olympus Corp. Chairman Tsuyoshi Kikukawa arrested

Japanese prosecutors arrested seven men, including former Olympus Corp. Chairman Tsuyoshi Kikukawa, for their alleged involvement in a massive $1.7 billion accounting fraud at the Japanese camera and medical equipment maker, the CNN reports.

The Japanese camera maker is facing shareholder lawsuits and may be subject to further criminal investigation after admitting to a 13-year cover-up. The company restated past securities reports and took a $1.3 billion reduction in net assets in December, the Washington Post reports.

The scandal surfaced late last year when then Olympus President Michael Woodford raised questions about huge payments for financial advice and acquisitions of companies unrelated to the company's mainstay businesses.

Olympus at first denied any wrongdoing but later acknowledged it hid 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s.

Kyodo reported Thursday, citing unidentified sources, that Kikukawa, Yamada and Mori have told prosecutors that they were involved in the cover-up, the AP reports.