Fraudulent Transactions Involving Fictitious and Inflated Orders to Subcontractors
First written in FY2018-Q3. 3 of 6 entries say "Mitigated", first in FY2018. Latest entry: FY2026.
0 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Anti-corruption Prevention of all forms of fraud and corruption Number of incidents: 0 0」
Regarding fraud and corruption, the company states that it identified and rectified 2 cases violating internal rules in the previous fiscal year, while the number of incidents in the fiscal year under review was 0. Education and group governance monitoring by the Compliance Promotion Committee continue. - FY2021MitigatedAnnual report
「We take the findings of the external investigation committee seriously and will work as one company to prevent recurrence and restore trust by establishing a Compliance Promotion Committee under the direct supervision of the President to foster compliance awareness among officers and employees, reviewing personnel rotation, revising procedures for outsourcing contracts, strengthening the check-and-balance functions of the administrative divisions, strengthening internal audit functions, and implementing other measures. We are committed to making every effort to restore trust.」
After fraudulent acts including cost reallocations and inflated orders came to light, measures to prevent recurrence and a Compliance Promotion Committee scheduled to be established on 1 July 2021 were specified based on the findings of an external investigation committee. - FY2021-Q3MaterialisedAnnual report
「In addition, an external investigation committee confirmed that the following misconduct had occurred at the Company's branches. ① Improper cost reallocation At the Tohoku Branch, Tokyo Architecture Branch, Nagoya Branch, Osaka Branch and Kyushu Branch, costs for construction and other work ordered by the Company from external contractors had been reallocated to the costs of different construction and other work. ② Misappropriation for personal use At the Construction Department of the Osaka Branch, contract prices paid to material suppliers were inflated or fictitious orders were placed, and the amounts corresponding to the inflated orders were used to pay for personal purchases. The total amount of misconduct identified through the investigation was ¥291 million,」
In addition to the existing risks involving fictitious and inflated orders, fraudulent cost reallocations and misappropriation of funds were identified at multiple branches this time, and total fraudulent transactions of ¥291 million were disclosed. - FY2019RestatedAnnual report
「This includes a ¥33 million decrease in net sales and a ¥55 million increase in cost of sales, representing the impact of the fraudulent transactions on the consolidated financial statements for prior fiscal years.」
It states that prior-period fraudulent transactions were reflected in the financial statements as a ¥33 million decrease in net sales and a ¥55 million increase in cost of sales. Strengthening the internal audit function and establishing a transparent personnel evaluation system continue to be identified as measures to prevent recurrence. - FY2018MitigatedAnnual report
「We take the results of this investigation seriously and have formulated measures to prevent recurrence centered on strengthening the internal audit division and establishing a transparent personnel evaluation system. Going forward, we will ensure rigorous compliance and all officers and employees will work together to restore trust.」
After fictitious and inflated orders were discovered, the company formulated measures to prevent recurrence centered on strengthening the internal audit function and establishing a transparent personnel evaluation system. Although the risk itself has already materialized, the response measures have been specified. - FY2018-Q3MaterialisedAnnual report
「It was recently discovered that the company had placed fictitious and inflated orders with certain subcontractors and made improper payments for construction costs, among other fraudulent transactions. The total amount of these fraudulent transactions was approximately ¥230 million. Amounts recorded as net sales, cost of sales and other items had already been reflected in retained earnings before the previous consolidated fiscal year and in profit or loss for the cumulative consolidated third quarter under review. The company determined that the impact on the consolidated financial statements and financial statements for prior fiscal years was immaterial and decided not to make a retrospective adjustment.」
Fictitious orders placed with certain subcontractors were discovered at multiple business locations and disclosed as fraudulent transactions totaling approximately ¥230 million. A third-party investigation also found that part of the funds was returned to employees and used for departmental social gatherings and other expenses.