Tokyo FM Broadcasting Co. said Wednesday that it engaged in improper accounting practices to hide a subsidiary’s losses.
The practices involved share transactions designed to exclude the struggling digital broadcasting unit from Tokyo FM’s consolidated earnings.
Specifically, Tokyo FM had a company close to the then president buy shares in the unit temporarily in order to lower its ownership ratio.
Tokyo FM is considering filing a damages suit against the former management team that authorized the transaction.
“This should never have happened. I apologize from the bottom of my heart,” said current Tokyo FM President Osamu Kurosaka at a news conference.
The accounting irregularities affected the three financial years ending last March. Tokyo FM plans to revise its past earnings reports by late September.
The revisions will show FM Tokyo had some ¥1.1 billion in operating losses. The unit in question currently has an excess of debts compared to its assets.
Tokyo FM postponed its earnings release, initially scheduled for late May, and commissioned a third-party panel to investigate the matter.