Formulation of Detailed Measures to Prevent Recurrence
AIR WATER INC. and the Group
The Group, including AIR WATER INC. and a total of 37 Group companies where inappropriate accounting cases were identified
Involvement by top management and members of management; difficulty in expressing dissenting views or raising concerns under a strongly top-down management structure; failure of checks and corrective functions; excessive performance pressure; insufficient ethics and accounting training; and inadequate governance, internal control and internal audit functions, among other factors
Company response
Investigation by the Special Investigation Committee (the investigation report was received on 31 March 2026)
Corporate culture reform; governance reform; rebuilding the management administration platform and internal controls; review of the overall corporate strategy, including a review of the business portfolio; corporate culture reform giving top priority to compliance; setting appropriate performance targets and eliminating excessive performance pressure; fundamental enhancement of education and training in ethics and accounting literacy; enhancement of the internal whistleblowing system; strengthening the Board of Directors’ oversight function; strengthening the Audit & Supervisory Board’s audit function; strengthening the role of the Nomination and Compensation Committee; appointing officers responsible for administration and finance; strengthening the functions of administrative departments, centered on the accounting department; rebuilding internal controls from a Group-wide perspective; strengthening the internal audit function; redefining core competencies; selecting and concentrating on businesses; and rationalizing and rebuilding Group companies
Top management will itself express its remorse regarding this matter and clearly state its responsibility as management, but the specific details of any compensation reduction, resignation or disciplinary action are Not disclosed
From fiscal 2026 onward, the Company will advance corporate culture reform, governance reform, rebuilding of the management administration platform and internal controls, and a review of the business portfolio. Organizational restructuring, strengthening of the officer and audit systems, increasing accounting and internal audit personnel, education and training, on-site audits of subsidiaries, and business selection and concentration will be implemented according to the respective timelines.
| Item | Details |
|---|---|
| Event name | Formulation of Detailed Measures to Prevent Recurrence |
| Date of occurrence | 3 April 2026 (the Board of Directors approved the detailed measures to prevent recurrence at a meeting held on the same day) |
| Date recognized / date notice received | 31 March 2026 (the date on which the investigation report was received from the Special Investigation Committee) |
| Subject Entity | AIR WATER INC. and the Group |
| Target Locations / Products | The Group, including AIR WATER INC. and a total of 37 Group companies where inappropriate accounting cases were identified |
| Cause | Involvement by top management and members of management; difficulty in expressing dissenting views or raising concerns under a strongly top-down management structure; failure of checks and corrective functions; excessive performance pressure; insufficient ethics and accounting training; and inadequate governance, internal control and internal audit functions, among other factors |
| Investigation structure | Investigation by the Special Investigation Committee (the investigation report was received on 31 March 2026) |
| Measures to prevent recurrence | Corporate culture reform; governance reform; rebuilding the management administration platform and internal controls; review of the overall corporate strategy, including a review of the business portfolio; corporate culture reform giving top priority to compliance; setting appropriate performance targets and eliminating excessive performance pressure; fundamental enhancement of education and training in ethics and accounting literacy; enhancement of the internal whistleblowing system; strengthening the Board of Directors’ oversight function; strengthening the Audit & Supervisory Board’s audit function; strengthening the role of the Nomination and Compensation Committee; appointing officers responsible for administration and finance; strengthening the functions of administrative departments, centered on the accounting department; rebuilding internal controls from a Group-wide perspective; strengthening the internal audit function; redefining core competencies; selecting and concentrating on businesses; and rationalizing and rebuilding Group companies |
| Directors' and officers' liability | Top management will itself express its remorse regarding this matter and clearly state its responsibility as management, but the specific details of any compensation reduction, resignation or disciplinary action are Not disclosed |
| Outlook | From fiscal 2026 onward, the Company will advance corporate culture reform, governance reform, rebuilding of the management administration platform and internal controls, and a review of the business portfolio. Organizational restructuring, strengthening of the officer and audit systems, increasing accounting and internal audit personnel, education and training, on-site audits of subsidiaries, and business selection and concentration will be implemented according to the respective timelines. |
Items this document does not state (15)
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 Special Investigation Committee’s investigation found inappropriate accounting practices within the Group, with involvement by top management and members of management identified in some cases. It also cited an unhealthy corporate culture resulting from management involvement, excessive performance pressure, and insufficient knowledge of governance, internal controls and accounting as factors contributing to the practices.