Sanyo Electric Co said yesterday it was fully cooperating with an investigation by securities authorities into suspected window-dressing of earnings at the struggling Japanese electronics maker.
Company spokesman Ryo Hagiwara said an investigation was under way but declined to confirm a report yesterday in Japanese newspaper Asahi Shimbun that Sanyo may have falsified its fiscal 2003 earnings report. He would not elaborate.
The Asahi said Sanyo had written off losses of 190 billion yen (US$1.6 billion) at its subsidiaries, but reported the losses as 50 billion yen. The Osaka-based company may have falsely reported a profit when it was in the red, it said.
PHOTO: AFP
Such differences have been corrected over the years, and the company's recent earnings reports are not false, the report said.
Sanyo shares plunged 21 percent to close at 181 yen in Tokyo on the Asahi report.
If the report is true, "there is a possibility the company will be fined," Yuji Yamamoto, Japan's minister for financial services, told reporters in Tokyo yesterday after a Cabinet meeting.
The probe follows recent news of dubious accounting at some Japanese companies which raised questions about whether the world's second-largest economy is keeping pace with global market standards.
In a high-profile court case, former executives at Internet services company Livedoor Co are on trial on charges of falsifying earnings. Major Japanese brokerage Nikko Cordial Corp was fined by securities authorities in December for manipulating profits.
The latest 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.
It 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, joined with Daiwa Securities SMBC Co and Sumitomo Mitsui Financial Group Inc to invest 300 billion yen in Sanyo in January last year in return for management control.
"Our support to Sanyo will remain the same," said Tetsu Morishima, a spokesman for Sumitomo Mitsui, which contributed 50 billion yen to Sanyo's bailout. He declined to comment on possible penalties.
Securities and Exchange Surveillance Commission spokesman Noboru Takayama declined comment, saying the watchdog does not comment on ongoing individual cases.
Sanyo is forecasting around a 50 billion yen loss for the fiscal year through next month.
Like other Japanese electronics makers, Sanyo has been battered in recent years by competition from cheaper Asian rivals. Its performance was also hurt by a 2004 earthquake near its chipmaking plant.
Sanyo has repeatedly promised a turnaround under what has been billed as innovative management headed by former journalist Tomoyo Nonaka, who became chairman and chief executive in 2005, one of a handful of star female chief executives at major Japanese companies.
Nonaka, who joined the company's board in 2002, was appointed with Toshimasa Iue, grandson of Sanyo's founder, who became president.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San