Internal control and governance deficiencies concerning the accounting treatment of the EV charging SPC
First written in FY2023. 3 of 5 entries say "Materialised", first in FY2023. Latest entry: FY2026.
No other company in this theme has enough history to compare yet.
- FY2026MitigatedAnnual report
「Based on the Improvement Report, Improvement Status Report and other documents, the company continues to implement and operate the following measures to prevent recurrence.」
The company continues to operate measures addressing the internal control deficiencies triggered by the SPC accounting issue, including the distribution of authority, oversight by the Board of Directors and Board of Corporate Auditors, and the strengthening of compliance, accounting, legal and internal audit functions. - 2026-06-12MaterialisedStatutory disclosure document
「Today, we announce that the Securities and Exchange Surveillance Commission publicly disclosed that it had recommended to the Prime Minister and the Commissioner of the Financial Services Agency, pursuant to Article 20, paragraph 1 of the Act for Establishment of the Financial Services Agency, that an order be issued requiring the Company to pay an administrative monetary penalty of ¥91.49 million in connection with the reports and other documents listed below.」
In connection with corrections to prior-period quarterly reports and securities registration statements, the Securities and Exchange Surveillance Commission recommended an order requiring payment of an administrative monetary penalty. The disclosure indicated progress toward regulatory financial sanctions concerning accounting treatment and internal-control issues over the consolidation of the EV charging SPC. - FY2025MitigatedAnnual report
「As stated in the “Improvement Report” dated 24 September 2024, based on the findings of the external investigation committee, the company recognizes the following as causes of the series of issues arising from the accounting treatment: ① concentration of authority in the then representative director and CEO and an extreme top-down culture, ② a management stance that prioritized performance, ③ insufficient internal checks by the administrative divisions, ④ ineffective oversight resulting from insufficient information sharing with the Board of Directors and Board of Corporate Auditors, ⑤ a management attitude that downplayed compliance awareness, ⑥ weaknesses in the company’s internal systems for accounting and legal compliance, ⑦ communication issues with the accounting auditor, and ⑧ insufficient use of external professionals. The company formulated measures to prevent recurrence,」
In response to the internal control deficiencies exposed by the SPC consolidation issue, the company is organizing the causes of recurrence and implementing measures to prevent recurrence based on the Improvement Report. - FY2025-H1MaterialisedAnnual report
「Accordingly, the company corrected the relevant portions of the quarterly consolidated financial statements included in the previously filed report for the second quarter of the fiscal year ended December 2023 and submitted a corrected report on 10 September 2024.」
The accounting treatment concerning the determination of whether EV Charging Infrastructure No. 1 GK should be included in the scope of consolidation was corrected in prior quarterly reports, and a corrected report was filed. - FY2023MaterialisedAnnual report
「As a result, for the fiscal year ended December 2023, revenue decreased by ¥2.18 billion, while operating loss increased by ¥880 million and ordinary loss increased by ¥960 million, due to the impact of combining the standalone financial statements of EV Charging Infrastructure No. 1 GK into the company’s consolidated financial statements and the impact of consolidation adjustment entries, including the elimination of intragroup transactions. The reason EV Charging Infrastructure No. 1 GK had not been included in the scope of consolidation was that, as stated in the Internal Control Report, the internal controls necessary to ensure reliable financial reporting had not functioned effectively within the group.」
Regarding the determination of the SPC’s inclusion in the scope of consolidation, an external investigation committee was established, digital forensics were conducted and the accounting treatment was corrected. The inclusion in the scope of consolidation resulted in substantial revisions to revenue and other figures, and the company concluded that its internal controls had not functioned effectively.