Sanyo Avoids Penalties Over Earnings Mess

Japan's securities watchdog has decided not to file a criminal complaint against Sanyo Electric or recommend it to be fined, Kyodo news agency said on Thursday, following a report that it may have failed to account for more than $1 billion in losses.

Sanyo said on Tuesday it was considering restating its parent-only earnings for the four years to March 2004 after the Asahi newspaper reported last week that the company had considered writing off losses of about 190 billion yen (US$1.6 billion) in 2003/04, mainly from subsidiaries, but ended up writing off only around 50 billion yen.

Sanyo had said it was being investigated by the Securities and Exchange Surveillance Commission (SESC).

The Yomiuri newspaper also said on Thursday that Sanyo was unlikely to be fined over the matter. Kyodo said the SESC made the decision because Sanyo would restate its earnings reports for the business years, which were before the government started imposing fines on companies that falsified financial statements.