Representatives from Japanese conglomerate Olympus and its UK subsidiary Gyrus Group Ltd appeared in court yesterday to face charges brought by the Serious Fraud Office (SFO) alleging that the companies had made 'false or misleading' statements to auditors from Ernst & Young (EY).

The charges relate to the issue of 176,981,106 preference shares by Olympus to Axes America, a financial adviser which it claimed had identified Gyrus as a suitable target for acquisition.

According to the SFO, Olympus told EY auditors that the shares were remuneration for financial advice, but Westminster magistrates court heard that the shares 'had been issued for a fraudulent purpose'.

The shares were sold by Axes to Olympus Finance UK for $620m (£393m), according to the SFO papers presented in court, so that the purchase price 'could then covertly be transferred to Olympus Corporation in Japan to conceal the extent of that company's losses in securities and other trading'.

The SFO alleged that in February 2011, Olympus knowingly sent a letter to EY, who were also Gyrus's auditors, which contained 'misleading, false or deceptive' information about Gyrus's financial statements.

In addition to the single charge against Olympus, Gyrus faces four related charges of making a misleading or false statement to its auditors, KPMG and EY, in 2010 and 2011. The Berkshire-based medical systems company was acquired by Olympus for $2.2bn (£1.4bn) in 2008.

Yesterday's brief hearing was adjourned until 24 September when the case will be transferred to Southwark Crown Court. No pleas were entered.

The SFO investigation into suspicious payments at Olympus followed statements by the company's newly appointed British chief executive Michael Woodford, who raised concerns about adviser fees shortly after taking on the job in 2011.