Misconduct by a former employee of the Company
Synchro Food Co.,Ltd. (the filing company)
Recruitment agency business for restaurants
The former employee's significant lack of awareness of compliance, deficiencies in operational management and internal controls during the launch phase of the new business, excessive dependence on individuals and the absence of checks and balances, and an incomplete approval process and insufficient management and supervision
Company response
The facts were investigated with the support of an external law firm
① Strengthening the checking framework: Review the processes for business negotiations and the execution of recruitment agency agreements, order acceptance, and sales recognition, and ensure that documents are prepared, checked, and registered by an assistant, approved by a supervisor, stored in the recruitment agency system, and accessible to all relevant parties. ② Strengthening the business operating structure: Eliminate the system under which supervisors hold concurrent responsibilities and assign them exclusively to the business, creating a four-person business operating structure including an assistant. ③ Strengthening internal audits: The internal audit department will regularly check business processes and review contractual documents. ④ Strengthening compliance training: Strengthen compliance training for all employees, promote understanding of decision-making standards through case studies including this misconduct, and continuously monitor the effectiveness of the training through the Risk and Compliance Committee.
The former employee was dismissed for disciplinary reasons effective 13 May 2026. The employee's supervisor was reprimanded.
Approximately ¥12 million in total. The correction has been reflected in the consolidated financial statements for the full fiscal year ending March 2026. The accounting classification in profit or loss is Not disclosed
Full fiscal year ending March 2026
The Company will consider its response, including legal action. Through the recurrence prevention measures, it will review its internal management framework and work to further strengthen its management and audit systems, including those covering group companies.
| Item | Details |
|---|---|
| Event name | Misconduct by a former employee of the Company |
| Date of occurrence | The misconduct occurred between June 2025 and March 2026 and was discovered in late March 2026 |
| Date recognized / date notice received | Discovered in late March 2026 |
| Subject Entity | Synchro Food Co.,Ltd. (the filing company) |
| Target Locations / Products | Recruitment agency business for restaurants |
| Cause | The former employee's significant lack of awareness of compliance, deficiencies in operational management and internal controls during the launch phase of the new business, excessive dependence on individuals and the absence of checks and balances, and an incomplete approval process and insufficient management and supervision |
| Amount of Impact on Business Performance | Approximately ¥12 million in total. The correction has been reflected in the consolidated financial statements for the full fiscal year ending March 2026. The accounting classification in profit or loss is Not disclosed |
| Accounting period in which recognized | Full fiscal year ending March 2026 |
| Date of filing / date of action | 13 May 2026 (the date of the disciplinary dismissal of the former employee) |
| Investigation structure | The facts were investigated with the support of an external law firm |
| Measures to prevent recurrence | ① Strengthening the checking framework: Review the processes for business negotiations and the execution of recruitment agency agreements, order acceptance, and sales recognition, and ensure that documents are prepared, checked, and registered by an assistant, approved by a supervisor, stored in the recruitment agency system, and accessible to all relevant parties. ② Strengthening the business operating structure: Eliminate the system under which supervisors hold concurrent responsibilities and assign them exclusively to the business, creating a four-person business operating structure including an assistant. ③ Strengthening internal audits: The internal audit department will regularly check business processes and review contractual documents. ④ Strengthening compliance training: Strengthen compliance training for all employees, promote understanding of decision-making standards through case studies including this misconduct, and continuously monitor the effectiveness of the training through the Risk and Compliance Committee. |
| Directors' and officers' liability | The former employee was dismissed for disciplinary reasons effective 13 May 2026. The employee's supervisor was reprimanded. |
| Outlook | The Company will consider its response, including legal action. Through the recurrence prevention measures, it will review its internal management framework and work to further strengthen its management and audit systems, including those covering group companies. |
Items this document does not state (12)
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 causes are said to include the former employee's lack of compliance awareness, as well as deficiencies in operational management and internal controls during the launch phase of the new business. Specific issues included excessive dependence on individuals, the absence of checks and balances, an incomplete approval process, and insufficient management and supervision.