(Bloomberg) Akebono Brake Industry Co. has become the latest addition to a series of corporate scandals in Japan, cutting earnings forecasts and executive pay after confirming problematic accounting of sales to distributors.

The auto-parts maker probably will lose 7 billion yen ($58 million) in the fiscal year ending in March, compared with a previous forecast for a 1.5 billion yen profit. The Tokyo-based company also trimmed its sales forecast by 1.7 percent to 283 billion yen, and reduced compensation for its president and three other executives for three months.

Akebono Brake inflated its sales and profit by “channel-stuffing” its distributors with too much inventory, according to a statement on Tuesday. The company said Nov. 4 it found evidence revenue was overstated by 210 million yen in the second quarter and delayed its earnings announcement by about a month.

The scandal at Akebono Brake follows Toshiba Corp.’s profit writedowns and Takata Corp.’s acknowledgment of risk it may not survive recalls of more than 40 million vehicles due to its faulty air bags. Prime Minister Shinzo Abe has said Japan needs more support from global investors and has pressed companies to improve corporate governance by boosting transparency and adding independent board members.

Japan Scandals
The flurry of scandals are a risk to Japan Inc.’s reputation for quality and order. Toyo Tire & Rubber Co. in October said an internal probe found one unit manipulated quality testing data for rubber products supplied to 18 customers over a decade. Asahi Kasei Corp. said one of its units had falsified data for foundation piles in condominiums, after one building sagged sideways. Matsumotokiyoshi Holdings Co., a Japanese drugstore chain, said it found likely accounting irregularities and is investigating the president of one unit it suspects inflated inventories to hide past losses.

Founded in 1929, Akebono Brake is one of the oldest companies in Japan’s auto industry. It counts the world’s biggest carmakers among its customers, including Toyota Motor Corp., Volkswagen AG and General Motors Co.

The supplier’s shares rose as much as 5.2 percent Tuesday and closed up 2.9 percent, its biggest gain since Oct. 7. The shares are down 12 percent since its first disclosure of the accounting issues on Nov. 4.

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