OSAKA (Kyodo) Sanyo Electric Co. approved a plan at an extraordinary board meeting Wednesday to increase capital by some 300 billion yen through a third-party allotment of new shares to rebuild its business.
Satoshi Iue, board member and eldest son of Sanyo founder Toshio Iue, announced the same day he will resign to take responsibility for the firm's dismal performance. Upon leaving the board, Satoshi Iue, 73, will become the firm's "supreme adviser."
The company also decided to abolish the posts of chief executive officer and chief operating officer.
Chairwoman Tomoyo Nonaka and President Toshimasa Iue are currently doubling as CEO and COO, respectively. While Nonaka, a former journalist, will retain her post, observers said the latest move was an effort on the part of the company to reduce her authority. She has been criticized for a lack of management experience.
The decisions will be formally approved at an extraordinary shareholders' meeting Feb. 24, officials of the ailing electronics maker said.
Speaking at a news conference at the firm's headquarters in Moriguchi, Osaka Prefecture, Vice President Koichi Maeda explained that Iue's resignation came from his strong feeling of responsibility.
As for Nonaka, he said: "Her role will not change. She remains the pinnacle of our (corporate) governance."
Sanyo plans to rebuild its business by acquiring some 300 billion yen in fresh capital from its main creditor, Sumitomo Mitsui Banking Corp., Daiwa Securities SMBC Co. and the Goldman Sachs Group Inc. through third-party allotment of new preferred shares.
After bolstering its capital, Sanyo will appoint five new board members from the three capital-supplying financial institutions, pending approval by shareholders.
As a result, a majority of the nine-member board of directors will be from Sumitomo Mitsui and the two other entities.
