Lenovo, the world’s third largest PC maker, is recalling a batch of 205,000 faulty laptop PC batteries that it jointly produced with Japanese electronics maker Sanyo, because they might emit sparks if jolted or dropped.

Both companies worked on the design of the lithium-ion batteries, which are larger and last longer than regular laptop batteries and were produced for use in Lenovo-branded laptops only.

Five incidents of overheating have been reported, and the fault caused minor injuries to one user in the US.

Sanyo, the world’s largest producer of lithium-ion batteries, said the problems with the Lenovo batch related to the casing of the battery, which was jointly designed by both companies and tested by Lenovo.

The companies are expected to share the financial burden of the recall, which has yet to be calculated.

Analysts warned that the recall could deliver yet another blow to Sanyo at a financially sensitive time.

About 100,000 of the affected units will be recalled in the US, with the remainder spread across the globe.

The worldwide recall comes amid ongoing restructuring efforts at Sanyo and a regulatory probe by the Securities and Exchange Supervisory Committee.

Shares in Sanyo, which is forecasting that the 2006 fiscal year will be its third consecutive year in the red, were further hit last week when the group admitted that it might need to restate three years’ worth of earnings.

The company is conducting an internal investigation of its accounts for the three years up to March 2004, amid allegations in the Japanese media that the company may have misreported losses during that time.

The fault is of a different type to the manufacturing problems encountered by Sony last year.

That fault forced Sony to undertake a worldwide recall of about 8m potentially faulty batteries that had been sold to nearly every main laptop manufacturer. The cost of the recall was more than Y50bn ($428m) and forced Sony to cut its full-year profit forecasts for the current fiscal year.

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