Sanyo suspected of false earnings report
Asahi Shimbun says the firm underreported its losses in 2003
TOKYO » Sanyo Electric Co. said today it was under investigation by securities authorities into suspected window-dressing of earnings at the struggling Japanese electronics maker.
Company spokesman Ryo Hagiwara said the company was fully cooperating with the investigation, but declined to confirm a report in today's edition of the Asahi Shimbun that Sanyo may have falsified its fiscal 2003 earnings report. He would not elaborate.
The Asahi said Sanyo may have written off far less losses than its subsidiaries had, and the Osaka-based company may have falsely reported a profit when it was in the red.
Sanyo shares plunged 21 percent to $1.48 in Tokyo afternoon trading.
Securities and Exchange Surveillance Commission spokesman Noboru Takayama said the watchdog does not comment on ongoing individual cases.
The Asahi said Sanyo had written off losses of $1.6 billion at its subsidiaries but reported the losses as $412 million.
Such differences have been corrected over the years, and the company's recent earnings reports are not false, the report said.
The investigation is a blow to Sanyo at a time when it has been struggling to turn around its business, trimming thousands of jobs, reducing factory space and dropping some businesses since announcing a restructuring plan in 2004.
Sanyo also is in position to become the biggest customer of Hawaii-based Hoku Scientific Inc., which last month signed a $370 million contract to provide polysilicon for solar panels to the Japanese company.
Sanyo got a much-needed capital boost a year ago from a group of investors led by Goldman Sachs Group Inc., which became the company's top shareholders and took over the board, putting new management in place.