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Sanyo amends earnings since 2000 to show bigger losses, securities watchdog urges penalty

Sanyo amends earnings since 2000 to show bigger losses, securities watchdog urges penalty

Sanyo Electric Co. said Tuesday it is amending earnings reports dating back to 2000 to record greater losses, inviting calls by regulators to fine the company for several years of accounting irregularities.
In revising its results, Sanyo said in a statement it has booked 6 billion yen (US$52.6 million; euro36.5 million) more in losses for the years from April 2000 through September 2007 than it had previously reported.
Sanyo had earlier reported an accumulated loss of 372.6 billion yen (US$3.3 billion; euro2.3 billion) in securities and assets at its 84 affiliates over the same period. Sanyo said the correction would not seriously affect the group.
Sanyo blamed a lack of understanding of accounting rules and principles, as well as weak internal regulatory systems, but denied any intentional falsification.
The company also said it would cut salaries and retirement payments from current and former management, including President Seiichiro Sano, and monthly wages from individuals involved in the problematic accounting.
However, Japan's Securities and Exchange Surveillance Commission accused Sanyo of faking the earnings report for the fiscal half that ended in September 2005, urging the Financial Services Agency to fine the company.
Sanyo allegedly had recorded a smaller loss amount at its affiliated companies than it had actually incurred for the period, the SESC, said in a statement, and demanded the FSA fine the company 8.3 million yen (US$72,800; euro50,600).
Tuesday's correction was the latest accounting scandal to hit Sanyo. The company acknowledged earlier this year that it had falsified its fiscal 2003 earnings, by reporting a profit instead of a loss.
The scandal comes as Sanyo has been trying to turn itself around after taking a beating from cheaper Asian rivals.
Sanyo takes the possible fine seriously, and will "further strengthen corporate governance" and internal regulations, company spokesman Ryo Hagiwara said.
Also Tuesday, the Tokyo Stock Exchange announced it has given Sanyo shares a special monitoring status while the bourse reviews the company's earnings to see if it violated listing rules.
The exchange said Sanyo Electric shares will be monitored until it completes a review of the company's earnings data for the six successive fiscal years through March 2006.
Investors can continue to trade Sanyo Electric shares during the review. The shares will be retuned to the exchange's first section if the bourse finds no evidence of illegal conduct.
Sanyo shares ended down 3.6 percent at 187 yen (US$1.64; euro1.14) Tuesday.