Mumbai: China's Lenovo group has agreed to share cost of recalling 205,000 Sanyo-made battery packs that can overheat its laptops.

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.

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.

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.

Akihiko Oiwa, a spokesman of the troubled Japanese electronics maker Sanyo Electric Co, refused to say what the final cost might be.

The laptop battery recall comes amidst an investigation of loss-making Sanyo by Japan's securities watchdog the Securities Exchange and Surveillance Commission (SESC).

Earlier this week Sanyo 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 $1 billion in losses, mainly at subsidiaries.

The company is set to post a loss for the year ending March 31 for a third straight year due to sluggish digital camera sales and heavy restructuring costs. Sanyo last year issued 300 billion yen worth of shares to Goldman Sachs and two other banks on a preferential basis at a deep discount.