Oki Says Spain Unit Account Overstatement Will Reduce Profit
Oki Electric Industry Co., the Japanese telecommunications-equipment maker put on delisting watch, said the overstatement of accounts by its Spanish unit will reduce net income by 30.8 billion yen ($395 million).
The impact is from the overstatement, unrecognized debt and money set aside for potentially uncollectable accounts at Oki Systems Iberica in the six years and three months through June 30, the company said today in a statement in Tokyo, where it’s based. Oki plans to correct its earnings Sept. 14.
Oki, with customers including International Business Machines Corp., will review ways to oversee its units and rebuild its internal control, according to the statement. The company was put on watch for a possible delisting by the Tokyo bourse last month after the company said its Spanish unit overstated accounts receivables, prompting the biggest one-day decline in shares in at least 37 years.
The company fired the head of its Spanish unit and will consider a legal action, Hideichi Kawasaki, president and chief executive officer, told reporters in Tokyo. Kawasaki didn’t name the head of the Spanish unit.
The stock fell 2 percent to 100 yen in Tokyo trading before the announcement.
Last month, the company said the overstatement by the Madrid-based unit will trim earnings by about 8 billion yen.
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