Troubled Japanese electronics manufacturer Sanyo Electric was on Tuesday threatened with delisting from the Tokyo Stock Exchange after it corrected six years of earnings reports. Sanyo, which has just started to recover after a major restructuring drive, revised earnings reports for six years from the 2000 fiscal year as it admitted it underestimated its losses.
"We take the earnings correction very seriously," Sanyo president Seiichiro Sano told a press conference at the company's base in Osaka as he bowed deeply. "We will create a system so that something like this is never repeated."
The Tokyo Stock Exchange said it would consider delisting Sanyo, whose shares fell 3.60 percent Tuesday despite strong gains on the broader market. "The market has shifted the stock to its supervisory post and will delist the company if the accounting errors present enough basis," Asia's largest bourse said in a statement.
Sanyo said its net loss at the parent level totalled 484.5 billion yen (4.24 billion dollars) between the year to March 2001 and year to March 2006, instead of the 478.6 billion yen loss it submitted earlier to authorities.
Sanyo said it had undervalued losses at its poorly performing semi-conductor and liquid crystal display (LCD) businesses on the grounds that it had expected earnings would eventually recover.
The company said the wider losses at the parent level would not affect its consolidated results during the years in question. A government investigation into the alleged irregularities was seen as a factor in the resignation in March of Sanyo's chairwoman Tomoyo Nonaka, one of Japan's top female executives.
She has kept tight-lipped on reasons for resigning, but media reports said she had unsuccessfully tried to press the company into a fuller probe of the window-dressing accusations.
Sanyo said Tuesday it had decided not to make retirement payments to 16 former board members who were involved in the accounting errors as well as to 13 incumbent board members. The company will also reduce monthly salaries for the president and executive vice-president by 60 percent for six months and cut remunerations for other high-ranking officials by 33-50 percent as punishment.
Sanyo, which started out making bicycle lamps after World War II before growing into a global player, has been hit hard by fierce competition in recent years for electronics products.
The company has slashed thousands of jobs as it seeks to streamline its operations. After three straight annual losses, Sanyo returned to the black in the first half of the current financial year and announced a major investment in rechargeable batteries in a bid to find a new source for growth.
Last year, Sanyo issued 2.6-billion-dollars' worth of new shares to Goldman Sachs, Daiwa Securities SMBC and Sumitomo Mitsui Banking, which together were given five of the nine seats on the company's board, effectively taking control.
Toshimasa Iue, a member of the family that founded Sanyo, stepped down earlier this year shortly after Nonaka's departure following clashes with the banks over how far to restructure.