Kanebo Ltd., a maker of food, pharmaceutical and household products, was delisted Monday from the Tokyo Stock Exchange for overstating its earnings for years.
Kanebo, one of the oldest listed companies in Japan, inflated its group net profit by a combined 216 billion yen in the five fiscal years through March 2004, and said it had actually been in negative net worth on a consolidated basis for nine years starting with fiscal 1995.
Kanebo has been working to rehabilitate its business with the help of the Industrial Revitalization Corp. of Japan since May 2004.
Established as a textile company in 1887, Kanebo became a listed company in 1889 on Japan's first stock exchange in Tokyo, the forerunner of the TSE.
Kanebo could be listed again as early as in fiscal 2006 if it meets the TSE's special listing criteria for a company that receives support from the IRCJ, such as making more than 400 million yen in profit during a one-year period.
But market observes say Kanebo is expected to face a difficult road in recovering its credibility with investors.
Relisting won't be easy because it is expected to post a group pretax loss in the current business year.