TROUBLED Japanese electronics maker Sanyo Electric Co. said Friday it would shoulder with China’s Lenovo Group the cost of recalling 205,000 Sanyo-made laptop battery packs that can overheat.

The ThinkPad battery recall, which caused Sanyo shares to slip as much as 4.2 percent, comes during an investigation of loss-making Sanyo by Japan’s securities watchdog, the Securities Exchange and Surveillance Commission (SESC). The news also invited comparison by analysts with a major recall of Sony Corp. batteries last year, estimated to cost Sony 51 billion yen (US$433 million).

The lithium-ion extended-life battery packs, jointly designed by Lenovo and Sanyo and tested by Lenovo, can overheat and spark if dropped hard on to the ground, the two companies said.

Sanyo, the world’s biggest maker of lithium-ion batteries, and Lenovo, the world’s No. 3 PC maker, have not yet decided how to split the recall cost, or what the final cost might be, Sanyo spokesman Akihiko Oiwa said.

The sum won’t impact earnings, he said.

Lenovo said it has received five reports of accidents from overheated batteries damaging laptops, with one customer reporting minor eye irritation from the smoke and sparks.

The recall would be an additional blow to Sanyo, which earlier last week said it is considering restating its parent earnings for the four years to March 2004, following a report that it may have failed to account for more than US$1 billion in losses, mainly at subsidiaries.

The recall was unlikely to hurt Lenovo, one analyst said.

(SD-Agencies)