Improper transactions by an employee of a business partner at a subsidiary
Cosmo Pia Co., Ltd. (a consolidated subsidiary of the Company)
QUO cards shipped to the address of UT Aim's office
An employee of UT Aim conducted the transactions without obtaining the company's approval, while presenting them as authorized transactions by UT Aim (based on the explanations provided by the employee and UT Aim)
Up to ¥400 million may remain uncollected, and the Company expects to record the full ¥400 million as an extraordinary loss
Fiscal year ending September 2026
Reflected in the revision of the full-year earnings forecast. Net income attributable to owners of the parent is expected to change from the previously announced forecast of a ¥436 million profit to a ¥184 million loss
Up to ¥400 million (payment is being sought from UT Aim and the UT Group)
Company response
Transactions involving highly liquid products will generally be suspended and subject to stricter controls (the actual scope and date of suspension are Not disclosed)
An internal investigation team has been established, including outside directors and outside audit & supervisory board members who are professionals such as attorneys and certified public accountants
Review of the credit management rules, accounting rules and other relevant internal rules; review of approval standards at the commencement and execution of transactions, credit management and procedures for confirming ordering authority at business partners for high-value transactions and transactions involving highly liquid products; renewed review of the framework for transactions involving highly liquid products, with such transactions generally to be suspended and subject to stricter controls; reinspection of the operation of rules throughout the Company Group; communication to and training of relevant officers and employees
Related procedures
Claims for damages and other civil legal measures, as well as criminal action (planned for the future)
The Company will take necessary measures, including efforts to collect the uncollected amount and recover the damages, discussions with UT Aim and the UT Group, investigations into similar damage and similar transactions involving the employee and receipt of reports, and claims for damages and other civil legal measures as well as criminal action. The investigation of UT Aim and receipt of its report are targeted for completion by the end of October.
If any matters requiring disclosure are identified in the future, the Company will promptly announce them.
| Item | Details |
|---|---|
| Event name | Improper transactions by an employee of a business partner at a subsidiary |
| Date of occurrence | August and September 2026 (the period during which QUO cards were procured and shipped following orders from the employee) |
| Subject Entity | Cosmo Pia Co., Ltd. (a consolidated subsidiary of the Company) |
| Target Locations / Products | QUO cards shipped to the address of UT Aim's office |
| Cause | An employee of UT Aim conducted the transactions without obtaining the company's approval, while presenting them as authorized transactions by UT Aim (based on the explanations provided by the employee and UT Aim) |
| Amount of Impact on Business Performance | Up to ¥400 million may remain uncollected, and the Company expects to record the full ¥400 million as an extraordinary loss |
| Accounting period in which recognized | Fiscal year ending September 2026 |
| Impact on Earnings Forecast | Reflected in the revision of the full-year earnings forecast. Net income attributable to owners of the parent is expected to change from the previously announced forecast of a ¥436 million profit to a ¥184 million loss |
| Type of litigation or proceeding | Claims for damages and other civil legal measures, as well as criminal action (planned for the future) |
| Amount of receivables at risk of non-collection or delayed collection | Up to ¥400 million (payment is being sought from UT Aim and the UT Group) |
| Suspended operations | Transactions involving highly liquid products will generally be suspended and subject to stricter controls (the actual scope and date of suspension are Not disclosed) |
| Investigation structure | An internal investigation team has been established, including outside directors and outside audit & supervisory board members who are professionals such as attorneys and certified public accountants |
| Measures to prevent recurrence | Review of the credit management rules, accounting rules and other relevant internal rules; review of approval standards at the commencement and execution of transactions, credit management and procedures for confirming ordering authority at business partners for high-value transactions and transactions involving highly liquid products; renewed review of the framework for transactions involving highly liquid products, with such transactions generally to be suspended and subject to stricter controls; reinspection of the operation of rules throughout the Company Group; communication to and training of relevant officers and employees |
| Outlook | The Company will take necessary measures, including efforts to collect the uncollected amount and recover the damages, discussions with UT Aim and the UT Group, investigations into similar damage and similar transactions involving the employee and receipt of reports, and claims for damages and other civil legal measures as well as criminal action. The investigation of UT Aim and receipt of its report are targeted for completion by the end of October. |
| Planned follow-up disclosure | If any matters requiring disclosure are identified in the future, the Company will promptly announce them. |
Items this document does not state (10)
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.Because it is difficult to reasonably estimate the recoverable amount, the Company expects to record the full ¥400 million that may remain uncollected as an extraordinary loss.