Improper Conduct by the Former Representative Director of a Consolidated Subsidiary and Employee Compliance Violations
DN HOLDINGS CO.,LTD. and its consolidated subsidiary 大日本ダイヤコンサルタント株式会社
The former representative director’s low level of compliance awareness, including prioritizing personal ties with the person under investigation without recognizing the seriousness of the matter, was a contributing factor. In addition, an employee improperly received travel and other expenses over an extended period and improperly used meeting expenses and other funds.
Company response
An investigation committee was established, including external experts with no interests in common with the Company. The committee chair is Yoshimura Jitsuyoshi (吉村実義), and the committee members are Saisho Hirofumi (税所博文), Sawada Tadayuki (澤田忠之), and Yamada Shigetsugu (山田重嗣). Establishment date: Not disclosed.
① Expansion and thorough implementation of compliance training; ② introduction of practical, participatory and problem-based training; ③ identification of issues through internal surveys and use of the findings in training topics; ④ special training for directors; ① introduction of an expense settlement system to prevent fraud and strengthen governance; ② review and tightening of expense settlement rules; ③ enhancement of management and checking functions for expense settlements; ④ internal communication and thorough implementation of expense settlement rules
Fujimoto Hiroyuki (藤本弘之) and Yoshino Masayuki (吉野正行) of the Company will have 40% of their monthly directors’ remuneration reduced for 3 months. Saito Tetsuro (齋藤哲郎), Representative Director and President of 大日本ダイヤ, will have 40% of his monthly directors’ remuneration reduced for 3 months; the director serving as General Manager of the Administration Headquarters will have 30% reduced for 3 months; and directors other than the General Manager of the Administration Headquarters will have 20% reduced for 3 months. Former directors who were directors of the Company or 大日本ダイヤ during the period in which the improper receipt of expenses was confirmed have offered to voluntarily return part of their remuneration.
Approximately ¥42 million (amount improperly received). The impact on the financial statements and previously reported financial results is currently under review.
The impact on the full-year consolidated earnings forecast for the current fiscal year is expected to be immaterial.
Related procedures
Preparation to file a criminal complaint and consideration of additional legal proceedings
Approximately ¥42 million (amount sought from the employee as repayment)
The Company will steadily implement measures to prevent recurrence and work to restore trust. 大日本ダイヤ is seeking repayment from the employee of the full amount improperly received, is preparing to file a criminal complaint, and will consider additional legal proceedings as necessary.
If it is determined that corrections to previously issued earnings reports, securities reports or other filings are necessary, the Company will make an announcement promptly.
| Item | Details |
|---|---|
| Event name | Improper Conduct by the Former Representative Director of a Consolidated Subsidiary and Employee Compliance Violations |
| Subject Entity | DN HOLDINGS CO.,LTD. and its consolidated subsidiary 大日本ダイヤコンサルタント株式会社 |
| Cause | The former representative director’s low level of compliance awareness, including prioritizing personal ties with the person under investigation without recognizing the seriousness of the matter, was a contributing factor. In addition, an employee improperly received travel and other expenses over an extended period and improperly used meeting expenses and other funds. |
| Amount of Impact on Business Performance | Approximately ¥42 million (amount improperly received). The impact on the financial statements and previously reported financial results is currently under review. |
| Impact on Earnings Forecast | The impact on the full-year consolidated earnings forecast for the current fiscal year is expected to be immaterial. |
| Type of litigation or proceeding | Preparation to file a criminal complaint and consideration of additional legal proceedings |
| Date of filing / date of action | 25 June 2026 (date disciplinary dismissal was implemented) |
| Claim amount / surcharge amount | Approximately ¥42 million (amount sought from the employee as repayment) |
| Investigation structure | An investigation committee was established, including external experts with no interests in common with the Company. The committee chair is Yoshimura Jitsuyoshi (吉村実義), and the committee members are Saisho Hirofumi (税所博文), Sawada Tadayuki (澤田忠之), and Yamada Shigetsugu (山田重嗣). Establishment date: Not disclosed. |
| Measures to prevent recurrence | ① Expansion and thorough implementation of compliance training; ② introduction of practical, participatory and problem-based training; ③ identification of issues through internal surveys and use of the findings in training topics; ④ special training for directors; ① introduction of an expense settlement system to prevent fraud and strengthen governance; ② review and tightening of expense settlement rules; ③ enhancement of management and checking functions for expense settlements; ④ internal communication and thorough implementation of expense settlement rules |
| Directors' and officers' liability | Fujimoto Hiroyuki (藤本弘之) and Yoshino Masayuki (吉野正行) of the Company will have 40% of their monthly directors’ remuneration reduced for 3 months. Saito Tetsuro (齋藤哲郎), Representative Director and President of 大日本ダイヤ, will have 40% of his monthly directors’ remuneration reduced for 3 months; the director serving as General Manager of the Administration Headquarters will have 30% reduced for 3 months; and directors other than the General Manager of the Administration Headquarters will have 20% reduced for 3 months. Former directors who were directors of the Company or 大日本ダイヤ during the period in which the improper receipt of expenses was confirmed have offered to voluntarily return part of their remuneration. |
| Outlook | The Company will steadily implement measures to prevent recurrence and work to restore trust. 大日本ダイヤ is seeking repayment from the employee of the full amount improperly received, is preparing to file a criminal complaint, and will consider additional legal proceedings as necessary. |
| Planned follow-up disclosure | If it is determined that corrections to previously issued earnings reports, securities reports or other filings are necessary, the Company will make an announcement promptly. |
Items this document does not state (12)
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.One aspect of the cause attributed to the former representative director was a low level of compliance awareness, including prioritizing personal ties with the person under investigation without recognizing the seriousness of the matter. The employee was found to have submitted expense claims without a substantive basis over an extended period and improperly used meeting expenses and other funds.