The securities industry watchdog is likely to recommend that the Financial Services Agency impose a surcharge on Futaba Industrial Co., an auto parts maker belonging to the Toyota Motor Corp. group, for padding its earnings, sources said Monday.
Futaba, Japan’s largest manufacturer of automobile mufflers, confirmed that the Securities and Exchange Surveillance Commission has investigating its downward revision of profits by a total of ¥114.8 billion for the five years through fiscal 2007.
But the company said in a statement it has heard “nothing about a surcharge” from the commission.
According to the corrected earnings reports released last December, Futaba was in the red to an extent of some ¥12.2 billion to ¥33.2 billion in group net loss in fiscal 2005, 2006 and 2007. But it had booked profits of ¥11 billion to ¥12.8 billion for the three years.
The company also registered profits larger than actual results in the previous two years.
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