Kickbacks and Embezzlement of Fictitious and Inflated Construction Payments by Employees of a Consolidated Subsidiary
First written in FY2024-Q2. 2 of 3 entries say "Advanced", first in FY2024-Q3. Latest entry: FY2025.
1 other company's latest entry also says "Advanced".
- FY2025AdvancedAnnual report
「Our company and Shinko Construction are steadily implementing measures to prevent recurrence, and our company is also strengthening governance monitoring of its other consolidated subsidiaries. To ensure that misconduct is never repeated, we will further strengthen our internal control systems and compliance framework, while all officers and employees of the group work together to implement specific recurrence-prevention measures.」
Regarding the misconduct at 信幸建設, the Company implemented measures to prevent recurrence based on the recommendations in the final report and expanded the scope of its response to monitoring other consolidated subsidiaries and strengthening group-wide internal controls. - FY2024-Q3AdvancedAnnual report
「Regarding the misconduct, an internal investigation committee chaired by an external attorney investigated the facts and, on 21 December of the same year, received its final investigation report, including recommendations to prevent recurrence.」
With respect to the misconduct that had already occurred, the Company reported progress in its response by receiving the final investigation report. The ¥785 million misconduct amount and the accounting impact for the quarter continued to be disclosed in the notes, and the disclosure did not state that the misconduct itself had been resolved. - FY2024-Q2MaterialisedAnnual report
「It was discovered that several employees of the company had conspired with contractors engaged by the company to pay fictitious and inflated construction costs and other amounts, then divert and embezzle part of those payments for themselves. The total amount of the misconduct identified was ¥785 million. The impact on the consolidated financial statements for the second quarter of the fiscal year ended March 2024 was to reverse ¥719 million in overstated cost of sales, record a receivable for the reimbursement claim, and, because collectibility of the receivable was uncertain, recognize an allowance for doubtful accounts against the remaining balance of ¥740 million, excluding amounts already recovered, inclusive of tax. The provision for the allowance was recorded as a non-operating expense.」
It was discovered that several employees of a consolidated subsidiary had conspired with an outsourced contractor to make fictitious and inflated construction payments, then divert and embezzle part of those payments. The total amount of the misconduct was ¥785 million. During the quarter, ¥719 million in cost of sales was reversed and an allowance for doubtful accounts of ¥740 million was recorded, among other measures. The Company considers the impact on prior-period results immaterial and will not restate prior-period financial statements.