Measures to Prevent Recurrence of the Unauthorized Transfer of Company Funds by the Company's Former Managing Director and CFO
eMnet Japan.co.ltd.
Bank transaction system, Board of Directors, Audit and Supervisory Committee, Internal Audit Office, internal reporting system
Weaknesses in the Company's governance framework. There was insufficient provision of information, and the independent oversight and audit functions of the Board of Directors, Audit and Supervisory Committee and internal audit were not fully exercised. The internal reporting system was not functioning effectively, and monitoring of privileged access rights in the bank transaction system was insufficient.
Company response
The Company has received the investigation report from the independent committee. The date of establishment of the independent committee and the name of its chairperson have not been disclosed.
Submit an activity report from the Risk and Compliance Committee to the Board of Directors once every 3 months; introduce a dual-reporting-line structure under which internal audit reports directly to the Board of Directors, including its audit plan; revise the rules governing matters submitted to the Board of Directors; review the operating procedures of the Board of Directors Secretariat, including the method of collecting agenda items; establish an environment in which the full-time Audit and Supervisory Committee member can directly access a broader range of information, including accounting data; hold interim meetings for exchanges of views between the accounting auditor and the Audit and Supervisory Committee; strengthen coordination among the three audit functions, including internal audit; outsource internal audit evaluation work and the organization of issues to an external service provider; establish a dedicated external reporting channel for the Company's retained attorney; notify employees internally of the channel and post information about it on the internal intranet; conduct regular awareness activities by email for all employees; eliminate the assignment of the "Privileged Approver" authority in the bank transaction system, which allows transfers to be made by the individual alone; and regularly monitor the usage history of the "Privileged Approver" authority and the list of authorities granted to members.
The Company has already disclosed a reduction in executive compensation effective 30 March 2026. The specific details of the reduction have not been disclosed.
The Company will promptly implement the measures to prevent recurrence, strengthen its internal control and corporate governance frameworks, and work to restore the trust of stakeholders.
| Item | Details |
|---|---|
| Event name | Measures to Prevent Recurrence of the Unauthorized Transfer of Company Funds by the Company's Former Managing Director and CFO |
| Subject Entity | eMnet Japan.co.ltd. |
| Target Locations / Products | Bank transaction system, Board of Directors, Audit and Supervisory Committee, Internal Audit Office, internal reporting system |
| Cause | Weaknesses in the Company's governance framework. There was insufficient provision of information, and the independent oversight and audit functions of the Board of Directors, Audit and Supervisory Committee and internal audit were not fully exercised. The internal reporting system was not functioning effectively, and monitoring of privileged access rights in the bank transaction system was insufficient. |
| Investigation structure | The Company has received the investigation report from the independent committee. The date of establishment of the independent committee and the name of its chairperson have not been disclosed. |
| Measures to prevent recurrence | Submit an activity report from the Risk and Compliance Committee to the Board of Directors once every 3 months; introduce a dual-reporting-line structure under which internal audit reports directly to the Board of Directors, including its audit plan; revise the rules governing matters submitted to the Board of Directors; review the operating procedures of the Board of Directors Secretariat, including the method of collecting agenda items; establish an environment in which the full-time Audit and Supervisory Committee member can directly access a broader range of information, including accounting data; hold interim meetings for exchanges of views between the accounting auditor and the Audit and Supervisory Committee; strengthen coordination among the three audit functions, including internal audit; outsource internal audit evaluation work and the organization of issues to an external service provider; establish a dedicated external reporting channel for the Company's retained attorney; notify employees internally of the channel and post information about it on the internal intranet; conduct regular awareness activities by email for all employees; eliminate the assignment of the "Privileged Approver" authority in the bank transaction system, which allows transfers to be made by the individual alone; and regularly monitor the usage history of the "Privileged Approver" authority and the list of authorities granted to members. |
| Directors' and officers' liability | The Company has already disclosed a reduction in executive compensation effective 30 March 2026. The specific details of the reduction have not been disclosed. |
| Outlook | The Company will promptly implement the measures to prevent recurrence, strengthen its internal control and corporate governance frameworks, and work to restore the trust of stakeholders. |
Items this document does not state (17)
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 explains that the root cause of the misconduct was weaknesses in its governance framework. Oversight and audit by the Board of Directors, Audit and Supervisory Committee and internal audit, the internal reporting system, and monitoring of privileged access rights in the bank transaction system were not functioning adequately.