Improper Use of Expenses, etc. by the Company's Representative Director and Chairman and Measures to Prevent Recurrence
FUKUDA DENSHI CO.,LTD. and the Company's subsidiary that was a contracting party for the sports event tickets in ④
The underground parking lot at the Company's Hongo Business Office, the subject person's private vehicles (up to 28 vehicles), drivers of company vehicles outsourced by the Company, entertainment expenses, and sports event tickets acquired under contracts by a subsidiary of the Company as a contracting party
The commingling of personal and official affairs by directors, including the Representative Director and Chairman. For the other directors and full-time Audit & Supervisory Board Members, measures to prevent the commingling of personal and official affairs by directors, including the Representative Director and Chairman, had not been adequately established.
Total: ¥154,497,155 (① ¥75,471,827, ② ¥16,983,087, ③ ¥23,225,873, ④ ¥38,816,368). The accounting classification is Not disclosed.
The consolidated results for the fiscal years ending March 2026 and March 2027
The impact on the consolidated results for the fiscal years ending March 2026 and March 2027 is immaterial.
Company response
The Audit & Supervisory Board investigated the facts with the assistance of external experts independent of the Company. Whether a third-party committee or special investigation committee has been established is Not disclosed.
① Establishment of a system for reviewing all entertainment expenses and other expenses used by the Representative Director. The Company will establish a system under which the Audit & Supervisory Board periodically reviews all entertainment and meeting expenses used by the Representative Director. ② Adoption of regulations governing the use of Company assets. The Company will establish regulations generally requiring directors to submit prior applications and obtain approval when using Company assets, as well as a system for periodically reporting such use to the Audit & Supervisory Board, and will strengthen controls by maintaining usage ledgers. ③ Strengthening of internal audits. The Company will conduct rigorous, focused internal audits each year of the use of Company property and other matters by directors, including the Representative Director. ④ Enhancement of training for directors. To foster directors' awareness of compliance, the Company will provide ongoing training for directors, including ethics training by external experts and study sessions on governance and other topics.
Representative Director and Chairman: voluntary repayment of 60% of executive compensation for 6 months. Representative Director and President: voluntary repayment of 40% of executive compensation for 3 months. Senior Managing Director: voluntary repayment of 30% of executive compensation for 3 months. Directors (excluding outside directors): voluntary repayment of 10% of executive compensation for 3 months. Full-time Audit & Supervisory Board Member: voluntary repayment of 10% of executive compensation for 3 months
Related procedures
Internal disciplinary action by the Board of Directors (voluntary repayment of executive compensation)
Requested reimbursement: ¥154,497,155 (not a claim amount in litigation or an administrative fine)
The Company will promptly receive full reimbursement in a lump sum from the subject person under the reimbursement agreement. The Company will thoroughly implement the measures it has formulated to prevent recurrence and will work to restore trust through a united effort by its officers and employees.
The Company plans to announce its financial results for the fiscal year ending March 2026 on 15 May 2026.
| Item | Details |
|---|---|
| Event name | Improper Use of Expenses, etc. by the Company's Representative Director and Chairman and Measures to Prevent Recurrence |
| Date of occurrence | ① From July 2021 to April 2026. ②–④ At least the past 10 years (specific dates of occurrence are Not disclosed) |
| Date recognized / date notice received | When the Audit & Supervisory Board obtained information regarding the improper use of expenses, etc. by the subject person (the specific date is Not disclosed) |
| Subject Entity | FUKUDA DENSHI CO.,LTD. and the Company's subsidiary that was a contracting party for the sports event tickets in ④ |
| Target Locations / Products | The underground parking lot at the Company's Hongo Business Office, the subject person's private vehicles (up to 28 vehicles), drivers of company vehicles outsourced by the Company, entertainment expenses, and sports event tickets acquired under contracts by a subsidiary of the Company as a contracting party |
| Cause | The commingling of personal and official affairs by directors, including the Representative Director and Chairman. For the other directors and full-time Audit & Supervisory Board Members, measures to prevent the commingling of personal and official affairs by directors, including the Representative Director and Chairman, had not been adequately established. |
| Amount of Impact on Business Performance | Total: ¥154,497,155 (① ¥75,471,827, ② ¥16,983,087, ③ ¥23,225,873, ④ ¥38,816,368). The accounting classification is Not disclosed. |
| Accounting period in which recognized | The consolidated results for the fiscal years ending March 2026 and March 2027 |
| Impact on Earnings Forecast | The impact on the consolidated results for the fiscal years ending March 2026 and March 2027 is immaterial. |
| Type of litigation or proceeding | Internal disciplinary action by the Board of Directors (voluntary repayment of executive compensation) |
| Date of filing / date of action | 14 May 2026 (the disciplinary action was approved at the Board of Directors meeting held today) |
| Claim amount / surcharge amount | Requested reimbursement: ¥154,497,155 (not a claim amount in litigation or an administrative fine) |
| Investigation structure | The Audit & Supervisory Board investigated the facts with the assistance of external experts independent of the Company. Whether a third-party committee or special investigation committee has been established is Not disclosed. |
| Measures to prevent recurrence | ① Establishment of a system for reviewing all entertainment expenses and other expenses used by the Representative Director. The Company will establish a system under which the Audit & Supervisory Board periodically reviews all entertainment and meeting expenses used by the Representative Director. ② Adoption of regulations governing the use of Company assets. The Company will establish regulations generally requiring directors to submit prior applications and obtain approval when using Company assets, as well as a system for periodically reporting such use to the Audit & Supervisory Board, and will strengthen controls by maintaining usage ledgers. ③ Strengthening of internal audits. The Company will conduct rigorous, focused internal audits each year of the use of Company property and other matters by directors, including the Representative Director. ④ Enhancement of training for directors. To foster directors' awareness of compliance, the Company will provide ongoing training for directors, including ethics training by external experts and study sessions on governance and other topics. |
| Directors' and officers' liability | Representative Director and Chairman: voluntary repayment of 60% of executive compensation for 6 months. Representative Director and President: voluntary repayment of 40% of executive compensation for 3 months. Senior Managing Director: voluntary repayment of 30% of executive compensation for 3 months. Directors (excluding outside directors): voluntary repayment of 10% of executive compensation for 3 months. Full-time Audit & Supervisory Board Member: voluntary repayment of 10% of executive compensation for 3 months |
| Outlook | The Company will promptly receive full reimbursement in a lump sum from the subject person under the reimbursement agreement. The Company will thoroughly implement the measures it has formulated to prevent recurrence and will work to restore trust through a united effort by its officers and employees. |
| Planned follow-up disclosure | The Company plans to announce its financial results for the fiscal year ending March 2026 on 15 May 2026. |
Items this document does not state (8)
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 stated that the cause was the commingling of personal and official affairs by directors, including the Representative Director and Chairman. It also stated that the other directors and full-time Audit & Supervisory Board Members had failed to adequately establish measures to prevent the commingling of personal and official affairs by directors, including the Representative Director and Chairman.