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Shares of Sanyo Electric fell as much as 29 per cent yesterday after the company said it was being investigated by Japan's securities watchdog and a newspaper reported it had failed to account for more than US$1 billion ($1.42 billion) in losses.
The stock closed down 21 per cent at 180.
Sanyo spokesman Akihiko Oiwa said the Securities and Exchange Surveillance Commission was conducting an investigation and the company was providing it with information. But he declined to disclose the purpose of the investigation.
The Asahi daily reported earlier that Sanyo was considering writing off losses of about 190 billion ($2.22 billion) in the year ended March 2004, mainly from subsidiaries, but it ended up writing off only around 50 billion.
The struggling electronics maker posted a small profit for the year, but if it had written off the losses properly it could have fallen into the red, the newspaper said.
Sanyo's earnings statement for the year to March 2004 was approved by Misuzu Audit Corp, formerly known as Chuo Aoyama.
Misuzu changed its name last year after regulators forced the firm to suspend client audits for two months for its role in a fraud at Kanebo, a textiles and cosmetics maker.
A Tokyo Stock Exchange spokesman said the bourse had no plans for the moment to put Sanyo's stock under administrative watch. Roughly half of companies put on the watch in the past have ended up being delisted.
Sanyo expects to fall into the red for a third straight year, hit by sluggish sales of digital cameras and mobile phones and heavy restructuring costs to close factories and cut thousands of jobs.
- REUTERS
