Akebono Tumbles as Another Accounting Scandal Emerges in Japan

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Akebono Brake Industry Co. shares tumbled the most in four years after the Japanese auto-parts maker said it found evidence that it had inflated revenue.

The shares fell as much as 19 percent to 294 yen in early Tokyo trading, their steepest intraday decline since March 2011. No other stock fell more than Akebono on the Topix index on Thursday, except for Takata Corp., which tumbled because of a separate scandal involving deadly air bags.

Akebono shares tumble after company reveals sales were inflated

Financial results for the latest quarter will probably be pushed back to December after a committee examines the extent of the possible accounting irregularities, Tokyo-based Akebono said in a statement Wednesday after the market close. The company found evidence of revenue being overstated by 210 million yen ($1.7 million) in the second quarter, it said.

The disclosure comes amid a scandal-ridden season in Japan that saw Toshiba Corp. admit to manipulating profits for years and air-bag maker Takata conduct the biggest recall in automotive history. It also comes as Prime Minister Shinzo Abe pushes companies to improve corporate governance.

"Inappropriate accounting and business has been attracting a lot of attention lately in today’s society, so investors are reluctant to hold stocks with uncertainties regardless of the scale," said Masayuki Doshida, an analyst at Rakuten Economic Research Institute in Tokyo.

The investigation probably will last about a month, Akebono said. Spokesman Shingo Suzuki said the company’s auditor pointed out that Akebono had sales that were prematurely booked in the September period. The committee will examine whether any similar instances have occurred, he said.

Akebono was founded in 1929, making it one of the oldest companies in Japan’s auto industry. It counts some of the world’s biggest carmakers as its customers, including Toyota Motor Corp., General Motors Co. and Volkswagen AG, according to Akebono’s website.