Sanyo says may restate its past earnings reports

The Asahi newspaper reported on Friday that Sanyo had considered writing off losses of about 190 billion yen ($1.6 billion) in the year ended March 2004, mainly from subsidiaries, but it ended up writing off only around 50 billion yen.

The struggling consumer 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 said later on Friday it was being investigated by Japan’s securities watchdog, the Securities and Exchange Surveillance Commission (SESC), sending its shares tumbling 21 percent in a day.

The company said on Tuesday it would make an announcement after reappraising shares in affiliates.

It is set to post a loss for the year ending March 31 for a third straight year due to sluggish digital camera sales and heavy restructuring costs -- conditions that forced it to issue 300 billion yen worth of preferred shares to Goldman Sachs and two other banks at a deep discount last year.

The company also said it will dissolve three subsidiaries later this year, including a joint venture with China’s Haier Group, which has a Hong Kong-listed arm, Haier Electronics

Sanyo and Haier Group established the venture, capitalised at 500 million yen, in 2002 to promote Sanyo’s products in China and Haier’s in Japan.

But now Haier Group, China’s top home appliance maker, has its own sales unit in Japan, while Sanyo plans to continue cooperating with Haier in promoting its electronics goods in China even after the planned dissolution of the venture.

Sanyo said dissolution of the three subsidiaries was expected to have little impact on its earnings.

Before the announcement, shares in Sanyo closed up 1.6 percent at 188 yen, outperforming a 0.52 percent fall in the benchmark Nikkei average

The shares were still down 18 percent from the closing price on Feb. 22, one day before the Asahi report.