The president of Sanyo, the loss-making Japanese electronics conglomerate, is to resign early next week as atonement for a string of management failures and an accountancy scandal that has badly dented the company’s image.

According to sources close to the company, Toshimasa Iue’s decision to step down may be a response to mounting pressure from Sanyo’s biggest stakeholders — three investment banks that arranged the 300 billion yen (£1.3 billion) bailout that saved Sanyo from collapse last year. Sources also say that his replacement may be drawn from the ranks of Sanyo management, but, critically, not from the founding Iue family.

Mr Iue’s father, Satoshi Iue, who acts as supreme adviser to the firm, is also likely to tender his resignation next week. His resignation is also understood to relate to the accountancy scandal in which Sanyo is mired. It may force the group to restate earnings for the years 2000 to 2003, while he was company president.

Sanyo is under investigation by the Securities Exchange Surveillance Commission, which has discovered that the firm may have understated valuation losses at its worst-performing subsidiaries. Analysts told The Times that the absence of founding-family members on the Sanyo board might accelerate its restructuring and speed the divestment of about 100 companies deemed to be “noncore”. Some believe that Sanyo may be preparing to sell its battery business, which, with the solar panel business, is thought to be the company’s highest-quality operation.

Daiwa Securities SMBC, Goldman Sachs and Sumitomo Mitsui Financial Group made their 2006 investment in Sanyo on expectations that Toshimasa Iue would deliver a comprehensive turnaround strategy for the troubled group.

Instead, Mr Iue has overseen what analysts have described as a “half-hearted” restructuring programme, a profit warning, a third consecutive year in the red and a possible “window-dressing” scandal surrounding four years of past financial statements.

The company has made combined losses of about £1.8 billion over the past three years and recorded shrinking margins on digital cameras and mobile phones.

Mr Iue’s expected decision to quit at a board meeting today comes after the resignation last week of Tomoyo Nonaka, the group chairman. Although her position brought her notices as “Japan’s most powerful woman”, Ms Nonaka had begun to draw heavy investor criticism for her failure to engineer the company’s recovery, her lack of experience in the electronics industry and her reliance upon a consult-ancy firm run by her husband.

The strongest candidate to replace Mr Iue is believed to be Seiichiro Sano, who has spent the past 30 years at the company. A spokesman said that management changes had not been decided.

Diary of woes

April 2005

Tomoyo Nonaka becomes Sanyo chairman, Toshimasa Iue is promoted to president

July

Sanyo announces three-year restructuring plan and says that there will be “substantial pain”

September

Details given of turnaround plan; analysts are unimpressed

January 2006

Management reshuffle; big investors gain control of board

March

Sanyo saved by Y300 billion bailout by Goldman Sachs, Daiwa Securities and Sumitomo Mitsui Financial Group

November

Profit warning says full-year result will be Y50 billion loss, rather than Y20 billion profit

February 2007

Sanyo says it may restate historic earnings amid regulatory inquiry

March

Resignation of Ms Nonaka

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