Scandal-hit Daio Paper Corp. said Saturday it will scratch four companies from its list of consolidated subsidiaries after kicking its former chairman off the board of directors over his massive borrowings from group companies.
Since former Chairman Mototaka Ikawa and his father Takao Ikawa, who was an advisor, have left the board but still own large stakes in dozens of subsidiaries, it will apply the new group coverage scheme starting with its earnings report for the period covering April to December last year.
It will also turn 24 of the 37 subsidiaries into equity method affiliates in which it has up to 50 percent of the voting rights, although total holdings will decline because of the pair’s departure.
The company is calculating the impact the changes will have on its performance and announce them in the near future, it said.
Ikawa, grandson of the founder, and other members of the family held a majority of the voting rights in many of the subsidiaries, including via family-owned businesses, but until the scandal, Daio Paper had considered them as identical with its management in terms of decision-making.
The four companies to lose subsidiary status are Daio Package Chubu Inc., Daio Engineering Co., Kyushu Daio Paper Packaging Corp. and Fuji Paper Supply Co.