A parts maker that is part of the Toyota Motor Group is likely to face a government penalty for overstating its profits, according to local media.
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“Sources familiar with the matter” told Kyodo News that Japan’s Securities and Exchange Surveillance Commission was likely to recommend that the Financial Services Agency impose a surcharge on Futaba Industrial, the country’s largest muffler maker, for padding its earnings.
Futaba reportedly admitted that the commission had been investigating its downward revision of profits by JPY114.8bn for the five years to the end of fiscal 2007 (31 March 2008).
But the company said in a statement it had heard ”nothing about a surcharge” from the commission.
According to Kyodo, corrected earnings reports released last December showed Futaba was in the red by JPY12.2bn to JPY33.2bn in group net loss in fiscal 2005, 2006 and 2007 but had booked profits of JPY11bn to 12.8bn on its results for the three years.
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By GlobalDataThe company also registered profits larger than actual results in the previous two years, the report said.
Futaba announced the downward revision of the past results on 25 December last year, denying an intention to inflate profit. The revision was necessary due to the ”miscalculation” of expenses, it said.
