The recent probe of Osaka-based Sanyo’s suspected window-dressing and other fraud cases reported about other Japanese companies ( internet service company,Livedoor, Japanese brokerage Nikko Cordial Corp) has posed a serious question of whether Japanese companies are keeping pace with global market standards.

Some details:

• Sanyo had written off losses of 190 billion yen ($1.6 billion) at its subsidiaries, but reported the losses as 50 billion yen ($412 million). The Osaka-based company may have falsely reported a profit when it was in the red
• Sanyo may have falsified its fiscal 2003 earnings report.
• Such differences have been corrected over the years, and the company’s recent earnings reports are not false
• Securities and Exchange Surveillance Commission spokesman Noboru Takayama declined comment, saying the watchdog does not comment on ongoing individual cases.

This latest investigation dealt a heavy blow to Sanyo at a time when it has been struggling to turn around its business In 2006, a group of investors led by Goldman Sachs Group Inc., became its top shareholders and took over the board, putting new management in place. The management is headed by former journalist Tomoyo Nonaka, who became chairman and chief executive in 2005 and Toshimasa Iue, grandson of Sanyo’s founder, who became president.

Sanyo is forecasting a 50 billion yen ($412 million) loss for the fiscal year through March.

(BusinessWeek.com 23/2/07)