There’s more bad news for struggling Apple display-maker Japan Display. After news of a former executive embezzling funds, the company has announced that it will be reviewing its past earnings.
That’s a major headache at a time when the ailing business is trying to raise 50 billion yen ($460 million) from Apple and other investors.
The unnamed former accounting executive defrauded Japan Display of around 578 million yen ($3.3 million). This took place between July 2014 and October 2018. The employee arranged payments to be made to a fictitious company. They were fired last year.
However, in the fallout of the embezzlement case, the display-maker says that it will take a look at its past earnings to make sure they are legit. The company has launched an internal investigation with its auditors. In the meantime, potential investors have said they’ll continue with bailout talks.
Japan Display faces trouble on multiple fronts. At one point, it was one of Apple’s biggest display manufacturers. But its failure to adopt OLED display technology over LCD meant that it has gradually been sidelined. Last week, it published its 11th consecutive quarterly net loss. This was blamed on disappointing display sales and restructuring costs.
The company still owes Apple almost $900 million for a smartphone display plant built four years ago. To help it through this rough patch, Apple has agreed to slow the pace of expected repayments. Apple is additionally paying money it owes Japan Display in shorter increments for cash flow.