Sanyo’s CFO Resigns, Earnings Worsen

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October 13, 2005 - Despite the announcement last month of Sanyo’s accelerated restructuring plan (which we covered here), Japan’s third-largest maker of consumer electronics has continued to lose profit at an increasing rate—and the departure of its chief financial officer, Yoichiro Furuse, only hurts the company more.

Yoichiro Furuse, a former employee of Sumitomo Mitsui Banking Corp. (SMBC) and Sanyo’s main creditor, left due to "different views over managing policies" according to Sanyo. A company source indicated that Furuse wanted to take more aggressive and dramatic cost-cutting measures, at odds with the more conservative strategies proposed by chief executive Tomoyo Nonaka and president Toshimasa Iue.

Though Furuse’s duties are currently being handled by senior officer Yoshihiro Nishiguchi, another former employee of SMBC, general confidence in the company continues to fall. Sanyo Electric Co.’s stocks dropped 2.4 percent after the announcement of Furuse’s departure and a full 20 percent since the beginning of 2005. Furuse’s exit and Sanyo’s worsening earnings, despite an accelerated restructuring that should supposedly reverse the trend, has prompted several analysts to take a poor view of Sanyo’s future.

Analyst Carlos Dimas from CSLA Asia-Pacific Markets said, "Under the circumstances a recovery would appear to be a real challenge."

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