End of a dynasty

Sanyo CEO Toshimaza Ie forced to leave the company

Sanyo Electric Co. , one of Japan's leading home appliance manufacturers, will replace its president. A high-profile financial scandal erupted when regulators suspected her of concealing losses in 2000-2004. According to local press reports, Sanyo wrote off about $1.6 billion from its unprofitable books to its subsidiaries. The investigation ended two weeks ago, but Japanese authorities proposed not to initiate a criminal case, but to resolve the conflict peacefully, requiring Sanyo to review and republish the issues that caused doubts about financial statements. However, the head of the company, Toshimaza Ie, announced yesterday that he would leave his post on April 1. With his resignation, a new stage will begin in Sanyo's corporate history. The company was established in 1947, and since then it has been managed exclusively by representatives of the Ye dynasty. The last of them, the grandson of its founder, continued the family business for 30 years. The duties of the head of the corporation will be performed by the current vice president, Seiichiro Sano, whose candidacy was approved by the board of directors of Sanyo.

Mr. Ye insists that he acted solely for the benefit of the corporation. In announcing his departure, he apologized for being powerless to make Sanyo a thriving company. “Whatever the opinion of me in the media or the public, as president I did everything to successfully move through the restructuring, although I did not have the opportunity to do much of what I intended,” the top executive said. However, Japanese media have pointed to the corporate scandal as a major factor in Mr. Ye's resignation.

After the scandal became public, Sanyo quickly began losing employees. A week ago, the head of the board of directors, Tomoyo Nonaka, announced her resignation. References to personal reasons for her dismissal, as in the case of Mr. Ye's resignation, did not satisfy the Japanese press, which considers the main version to be disagreements with members of the board of directors. Journalists saw Ms. Nonaka as a champion of corporate integrity, convincing the public that she insisted on an inconvenient and thorough internal investigation to establish the causes of financial irregularities and name those responsible. Ms. Nonaka was appointed to her post in 2005, with the corporation hoping that the new head of the board of directors would revitalize its image and increase sales. The miracle, however, did not happen. Like many other Japanese companies, Sanyo has suffered greatly from pressure from Asian competitors, particularly Chinese manufacturers. To reduce costs, the company continues to cut production and lay off employees, hoping for a new round of its corporate history.

Denis UVAROV