Bummer seeing Sanyo having trouble as they are one of the brands I’ve looked favorably upon over the years. Alleged creative bookkeeping has caused an investigation and their Chairwoman Tomoyo Nonaka resigned yesterday unmysteriously over “personal reasons.”

Sanyo has been cooperating with an investigation by securities authorities into suspected window-dressing of earnings. Local media reports have said Sanyo wrote off losses of 190 billion yen ($1.63 billion) at its subsidiaries in 2003, but reported the losses as 50 billion yen ($429 million).

I wonder if they had reported the 190 billion yen loss would the stock backlash have been as bad as it will be over this investigation and chairwoman resigning? Investors, ok I’ll speak for myself, tend to be more disturbed by deceit and dishonesty than poor financial results. I still own Yahoo stock despite pretty lousy results in 2006. I may not like a lot of things Yahoo has done and have written here about this disappointment, but if it ever appears that they are doing anything dishonest with the numbers, I’d be selling quickly.

Yahoo stock results in 2007 should be easier to improve upon 2006 results. Everybody has bad months and good companies can have bad years too.

Didn’t we learn as children about the importance of honesty? The best financial advice for companies is to tell the truth even when it is bad and yet we keep seeing stories where people are doing — or are accused of doing — otherwise. Time and time and time again. Enron was a painful reminder for too many people that lies on financial statements rarely go away.

Important to remember innocent until proven guilty, but does news like this change your opinion of companies? Or do you see it as the action of a small few and not representative of the company at large? If the investigation turns up financial foul play, the brand will likely be tarnished for me, what about you?

Did this post make you go hmm?

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