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March 3, 2008 |
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IHI CORP: Denies Asahi Report on Hiding Huge Losses IHI Corp. rejected a report published in the Asahi Shimbun that its top executives knew and hidden huge operating losses for fiscal year 2006. The Asahi Shimbun report implied that IHI management hid the losses in order to overvalue shares it sold to the public in January and June last year. "We are denying the report," a company spokesman told Reuters, adding that the company would issue an official statement shortly. T he spokesman declined to be identified. Asahi Shimbun reported that the company's declaration that it became aware of the losses only in July 2007 contradicts documents that prove management knew about the losses in April. The same paper relates that IHI reported operating profit of JPY24.6 billion for fiscal year 2006. The company's earnings release, however, did not include a combined JPY7 billion loss from its boiler projects in Kanagawa and Ehime prefectures. After the company concluded its internal investigation, it revised its 2006 report with a consolidated operating loss of JPY5.6 billion after booking an additional loss of JPY30 billion. The Tokyo Stock Exchange did not delist IHI stock but required the company to submit an annual report detailing its management system. Bloomberg News says that if IHI fails to improve within three years, its shares will be delisted from the local stock market. Based in Tokyo, Japan, IHI Corporation, -- http://www.ihi.co.jp -- formerly Ishikawajima-Harima Heavy Industries Co., Ltd., is a Japan-based company engaged in six business segments. The Logistics and Steel segment offers concrete products, automated storages, loaders and others. The Machinery segment offers plastic processing machines, industrial boilers, pumps and others. The Energy Plant segment develops waste incineration facilities, nuclear power plants, thermal power plants and process plants, water treatment plants, renewable power plants and other facilities. The Aerospace segment produces aircraft engine parts and provides aircraft maintenance services. The Ship and Offshore segment builds container ships, bulk carriers, tankers and other ships, as well as develops marine equipment and machinery and provides design and engineering services. The Others segment provides real estate, financial and insurance services. The Troubled Company Reporter-Asia Pacific reported on Feb 14, 2008, that Standard & Poor's Ratings Services revised its outlook on the long-term corporate credit rating on IHI Corp. to negative from stable, reflecting growing expectations that the company's steady earnings recovery would be delayed, following the Tokyo Stock Exchange's announcement that it will place the company's stock on "alert status." The outlook change also reflects concerns that the company's financial flexibility will be constrained to some extent by this action. At the same time, Standard & Poor's affirmed its 'BB+' long-term corporate credit and 'BBB-' long-term senior unsecured issue ratings on the company. |
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