Sanyo Electric Co. will name its chairman's eldest son as its new president, replacing Yukinori Kuwano, who will step down to take responsibility for a record net loss in the past business year.
The Osaka-based company will name Toshimasa Iue, a 42-year old executive vice president and grandson of the company's late founder Toshio Iue, to the top job, the source said.
Toshimasa Iue joined Sanyo in 1989 after graduating from Boston University with a masters degree in business administration. He became executive vice president in 2002 and added chief marketing officer to his title in 2003.
The management change will be put to shareholders at a meeting in June.
If approved, Toshimasa Iue would become the youngest president in the company's 58-year history and the first member of the founding family to head Sanyo since his father, current chairman Satoshi Iue, ended his stint at the top in 1992.
The new president will have his work cut out for him.
In its third downward revision to its full-year estimates, Sanyo said last month that it expected to post a group net loss of $1.11 billion for the year ended March 31, hit by sluggish demand for digital cameras and heavy damage to a domestic chip factory from an earthquake in October.
In light of the record loss, Sanyo said it would cancel its year-end dividend. The company paid 3 yen per share for the first half, and had planned a 3 yen year-end payout.
Following the latest earnings revision, Deutsche Securities cut its investment rating on Sanyo to "sell" from "hold", citing among other things concerns the company would have to issue new shares to bolster its deteriorating financial position.