The Tokyo District Court handed suspended prison terms Monday to former Kanebo Ltd. President Takashi Hoashi and ex-Vice President Takashi Miyahara for colluding with auditors to cover up over 160 billion yen in capital deficits in fiscal 2001 and 2002.

The court sentenced Hoashi, 70, to two years in prison and Miyahara, 64, to 18 months. Both terms were suspended for three years.

Presiding Judge Hidetaka Watanabe condemned the fraud at what was then a major cosmetics and textile maker as malicious, and said it harmed shareholder faith in Japan's stock market. But he suspended both sentences, saying the firm was already heavily in debt when Hoashi and Miyahara assumed their posts in 1998.