Receipt and publication of the Special Investigation Committee’s investigation report
Sanyo Trading Co.,Ltd.’s consolidated subsidiary Sanyo Corporation of America (SCOA), and 三洋機械工業株式会社
SCOA’s bank accounts and the ordinary deposit and current deposit accounts at Branch ■■ of Bank B held by 三洋機械工業
Deficiencies in autonomous risk management and control activities; inadequate measures against fraud risk and insufficient management and monitoring; inadequate evaluation and improvement functions through internal audits
A ¥618 million extraordinary loss was recorded for the fiscal year ended September 2026, comprising ¥614 million in fraudulent expenditures at SCOA and ¥4 million attributable to the current fiscal year at 三洋機械工業.
Fiscal year ending September 2026
The extraordinary loss related to the misconduct is reflected in the full-year consolidated results for the fiscal year ended September 2026. For details, see the notice published on the same date concerning the recording of an extraordinary loss and the difference between the forecast and actual full-year consolidated results for the fiscal year ended September 2026.
Company response
The Special Investigation Committee established on 18 September 2026. The chair is Yuki Daisuke (結城 大輔), and the members are Tanaka Shinsuke (田仲 信介) and Karasawa Hideki (唐澤 英城). The investigation was conducted from 18 September to 5 November 2026.
Fundamental review of the cash and cash equivalents management framework and business processes; appropriate management of authentication methods and access rights; establishment of effective segregation of duties and approval processes; introduction of verification procedures independent of internal company information; strengthening of group controls and monitoring functions by headquarters administrative divisions; formulation and dissemination of group-wide management standards, policies and procedures; institutionalization of proactive risk management and corrective measures when risk events occur; strengthening of compliance initiatives; enhancement of the internal audit function; appropriate performance of audit activities and internal control assessments in accordance with the internal audit rules; ensuring organic collaboration through the second line of defense and the three lines of audit, based on an understanding of the independence of internal audit; and strengthening administrative divisions and functions and developing human resources
The former chief financial officer of SCOA was dismissed for disciplinary reasons effective 6 November 2026. Strict disciplinary action is also scheduled for the employee concerned at 三洋機械工業. The responsibility of the other officers is Not disclosed.
Related procedures
Investigation by the Special Investigation Committee. Legal measures, including filing criminal charges and seeking civil damages, are under consideration.
The Company will formulate measures to prevent recurrence and implement them promptly. It will take strict disciplinary action against the employee at 三洋機械工業 and consider legal measures against both parties, including filing criminal charges and seeking civil damages.
The specific measures to prevent recurrence will be announced again once finalized, targeted for mid-November 2026. The Company will promptly disclose any matters requiring disclosure.
| Item | Details |
|---|---|
| Event name | Receipt and publication of the Special Investigation Committee’s investigation report |
| Date of occurrence | From June to September 2026 (misappropriation of SCOA funds); from 2017 to 2026 (misconduct at 三洋機械工業) |
| Date recognized / date notice received | 9 November 2026 (the date on which the investigation report was received from the Special Investigation Committee). The fraud at SCOA was discovered in early September 2026, while the employee concerned admitted the misconduct at 三洋機械工業 on 29 October 2026. |
| Subject Entity | Sanyo Trading Co.,Ltd.’s consolidated subsidiary Sanyo Corporation of America (SCOA), and 三洋機械工業株式会社 |
| Target Locations / Products | SCOA’s bank accounts and the ordinary deposit and current deposit accounts at Branch ■■ of Bank B held by 三洋機械工業 |
| Cause | Deficiencies in autonomous risk management and control activities; inadequate measures against fraud risk and insufficient management and monitoring; inadequate evaluation and improvement functions through internal audits |
| Amount of Impact on Business Performance | A ¥618 million extraordinary loss was recorded for the fiscal year ended September 2026, comprising ¥614 million in fraudulent expenditures at SCOA and ¥4 million attributable to the current fiscal year at 三洋機械工業. |
| Accounting period in which recognized | Fiscal year ending September 2026 |
| Impact on Earnings Forecast | The extraordinary loss related to the misconduct is reflected in the full-year consolidated results for the fiscal year ended September 2026. For details, see the notice published on the same date concerning the recording of an extraordinary loss and the difference between the forecast and actual full-year consolidated results for the fiscal year ended September 2026. |
| Type of litigation or proceeding | Investigation by the Special Investigation Committee. Legal measures, including filing criminal charges and seeking civil damages, are under consideration. |
| Date of filing / date of action | The former chief financial officer of SCOA was dismissed for disciplinary reasons effective 6 November 2026. |
| Investigation structure | The Special Investigation Committee established on 18 September 2026. The chair is Yuki Daisuke (結城 大輔), and the members are Tanaka Shinsuke (田仲 信介) and Karasawa Hideki (唐澤 英城). The investigation was conducted from 18 September to 5 November 2026. |
| Measures to prevent recurrence | Fundamental review of the cash and cash equivalents management framework and business processes; appropriate management of authentication methods and access rights; establishment of effective segregation of duties and approval processes; introduction of verification procedures independent of internal company information; strengthening of group controls and monitoring functions by headquarters administrative divisions; formulation and dissemination of group-wide management standards, policies and procedures; institutionalization of proactive risk management and corrective measures when risk events occur; strengthening of compliance initiatives; enhancement of the internal audit function; appropriate performance of audit activities and internal control assessments in accordance with the internal audit rules; ensuring organic collaboration through the second line of defense and the three lines of audit, based on an understanding of the independence of internal audit; and strengthening administrative divisions and functions and developing human resources |
| Directors' and officers' liability | The former chief financial officer of SCOA was dismissed for disciplinary reasons effective 6 November 2026. Strict disciplinary action is also scheduled for the employee concerned at 三洋機械工業. The responsibility of the other officers is Not disclosed. |
| Outlook | The Company will formulate measures to prevent recurrence and implement them promptly. It will take strict disciplinary action against the employee at 三洋機械工業 and consider legal measures against both parties, including filing criminal charges and seeking civil damages. |
| Planned follow-up disclosure | The specific measures to prevent recurrence will be announced again once finalized, targeted for mid-November 2026. The Company will promptly disclose any matters requiring disclosure. |
Items this document does not state (9)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The Company identified deficiencies in autonomous risk management and control activities, inadequate measures against fraud risk and insufficient management and monitoring, and inadequate evaluation and improvement functions through internal audits as the causes.