Worth reading
86Important
0–100. This measures how worthwhile something is to read, not how good or bad the company is.Direction
Mixed performance
Direction inferred from the company’s description.Scale
570160
Thousands of yen (impact on quarterly net income for the first quarter of the fiscal year ending December 2025, including multiple correction impacts such as a ¥188,483 thousand decrease)Wording
Definitive
How definitive the wording is.Decision and Details
Extraordinary meeting of the Board of Directors (resolution to establish a third-party committee)Submission of an improvement report to the Tokyo Stock Exchange
Decision11 January 2026 (resolution to establish the third-party committee); 16 June 2026 (submission of the improvement report)
Period CoveredCorrected financial results from the third quarter of the fiscal year ended December 2023 through the third quarter of the fiscal year ended December 2025, and measures to prevent recurrence from 2026 onward
Implementation16 June 2026 (submitted)
Going forwardBy July 2026, the Company will revise its various rules and manuals and begin monthly reporting to the Board of Directors, quarterly risk reporting, dual reporting of internal audit findings, and regular reviews of access privileges for banking systems. From November 2026, compliance training for all officers and employees will be held at least once a year.
AmountMisappropriated expenditures: ¥66.45 million in cash withdrawals and ¥540 million in transfers to personal bank accounts. Total misappropriated expenditures: not disclosed. Impact of corrections to prior-year financial results: quarterly net income for the first quarter of the fiscal year ended December 2025 decreased by ¥188,483 thousand, interim net income for the second quarter decreased by ¥223,442 thousand, and quarterly net income for the third quarter decreased by ¥252,102 thousand, among other impacts.
Quantity / scale86 instances of misappropriated expenditures (70 cash withdrawals and 16 bank transfers). The third-party committee comprises 2 attorneys, 1 certified public accountant and others.
Reason
The former CFO misappropriated company funds for personal use and falsified accounting records and other documents to conceal the misconduct. The Company identified the concentration of authority in the former CFO, the failure of checks and balances by the Administration Division, internal audit and the Audit and Supervisory Committee, and deficiencies in the whistleblowing system as contributing factors.
Impact on Business Performance
The Company corrected its prior-year financial results. Net income for the first quarter of the fiscal year ended December 2025 was corrected from ¥41,876 thousand to a net loss of ¥146,607 thousand, and net assets were corrected from ¥1,399,666 thousand to ¥1,146,620 thousand. Net income for the third quarter of the fiscal year ended December 2025 was corrected from ¥87,035 thousand to a net loss of ¥165,066 thousand, and net assets were corrected from ¥1,377,588 thousand to ¥1,060,923 thousand.
| Item | Details |
|---|---|
| Matter Covered | Submission of an improvement report to the Tokyo Stock Exchange |
| Decision-Making Body | Extraordinary meeting of the Board of Directors (resolution to establish a third-party committee) |
| Decision Date | 11 January 2026 (resolution to establish the third-party committee); 16 June 2026 (submission of the improvement report) |
| Implementation Date | 16 June 2026 (submitted) |
| Period Covered | Corrected financial results from the third quarter of the fiscal year ended December 2023 through the third quarter of the fiscal year ended December 2025, and measures to prevent recurrence from 2026 onward |
| Amount | Misappropriated expenditures: ¥66.45 million in cash withdrawals and ¥540 million in transfers to personal bank accounts. Total misappropriated expenditures: not disclosed. Impact of corrections to prior-year financial results: quarterly net income for the first quarter of the fiscal year ended December 2025 decreased by ¥188,483 thousand, interim net income for the second quarter decreased by ¥223,442 thousand, and quarterly net income for the third quarter decreased by ¥252,102 thousand, among other impacts. |
| Quantity / scale | 86 instances of misappropriated expenditures (70 cash withdrawals and 16 bank transfers). The third-party committee comprises 2 attorneys, 1 certified public accountant and others. |
| Impact on Business Performance | The Company corrected its prior-year financial results. Net income for the first quarter of the fiscal year ended December 2025 was corrected from ¥41,876 thousand to a net loss of ¥146,607 thousand, and net assets were corrected from ¥1,399,666 thousand to ¥1,146,620 thousand. Net income for the third quarter of the fiscal year ended December 2025 was corrected from ¥87,035 thousand to a net loss of ¥165,066 thousand, and net assets were corrected from ¥1,377,588 thousand to ¥1,060,923 thousand. |
| Reason | The former CFO misappropriated company funds for personal use and falsified accounting records and other documents to conceal the misconduct. The Company identified the concentration of authority in the former CFO, the failure of checks and balances by the Administration Division, internal audit and the Audit and Supervisory Committee, and deficiencies in the whistleblowing system as contributing factors. |
| Governing Rule | Article 504, Paragraph 1, Item 1 and Paragraph 3 of the Securities Listing Regulations, and the Japan Federation of Bar Associations' Guidelines for Third-Party Committees in Corporate Misconduct Cases |
| Related previous disclosures | Notice Regarding the Submission of Corrected Reports for Prior-Year Securities Reports and Other Documents and Corrections to Prior-Year Earnings Summaries and Other Disclosures, disclosed on 31 March 2026 |
| Future plans | By July 2026, the Company will revise its various rules and manuals and begin monthly reporting to the Board of Directors, quarterly risk reporting, dual reporting of internal audit findings, and regular reviews of access privileges for banking systems. From November 2026, compliance training for all officers and employees will be held at least once a year. |
The reasons the company gives
The company's own explanation, not something inferred from the numbers.It was discovered that the former CFO had misappropriated company funds for personal use and falsified accounting records and disclosure documents to conceal the misconduct. The Company identified the concentration of authority, deficiencies in checks and balances and internal audit, and weaknesses in the whistleblowing system as contributing factors, and will implement measures to prevent recurrence.
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