Improper expenditures at an overseas consolidated subsidiary
A&D SCALES CO., LTD. (Korean consolidated subsidiary)
Deposits held by A&D SCALES CO., LTD.
The employee withdrew deposits without following the required approval procedures and used the funds for personal purposes.
Approximately ¥270 million (approximately KRW 2.5 billion; expected). The ¥243 million loss incurred through 31 March 2026 has been reflected in consolidated results for the fiscal year ending March 2026.
Consolidated results for the fiscal year ending March 2026
At this time, the Company has not identified any additional impact on earnings that requires disclosure. The impact on the business plan is considered limited, and the impact of this matter has not been reflected in the revised medium-term management plan announced today.
Related procedures
Consultation with and filing of a report with the police concerning a suspected embezzlement case
The police station with jurisdiction in Chungcheongbuk-do, South Korea
Company response
An internal investigation and inquiries with relevant parties. The Company has interviewed the employee and relevant parties, checked fund transfers and taken other steps, and the investigation is ongoing.
Review of the fund management framework and internal controls has commenced; formulation and thorough implementation of measures to prevent recurrence; strengthening of the management framework across the Group
The Company will continue interviewing the employee and relevant parties and checking fund transfers. It will proceed with the formulation and thorough implementation of measures to prevent recurrence and strengthen the management framework across the Group. The total amount of improper expenditures may change.
| Item | Details |
|---|---|
| Event name | Improper expenditures at an overseas consolidated subsidiary |
| Date of occurrence | February to April 2026 (multiple expenditures) |
| Date recognized / date notice received | 29 April 2026 (the date the Company was alerted by the auditor to a discrepancy between the deposit balance and the balance recorded in the books) |
| Subject Entity | A&D SCALES CO., LTD. (Korean consolidated subsidiary) |
| Target Locations / Products | Deposits held by A&D SCALES CO., LTD. |
| Cause | The employee withdrew deposits without following the required approval procedures and used the funds for personal purposes. |
| Amount of Impact on Business Performance | Approximately ¥270 million (approximately KRW 2.5 billion; expected). The ¥243 million loss incurred through 31 March 2026 has been reflected in consolidated results for the fiscal year ending March 2026. |
| Accounting period in which recognized | Consolidated results for the fiscal year ending March 2026 |
| Impact on Earnings Forecast | At this time, the Company has not identified any additional impact on earnings that requires disclosure. The impact on the business plan is considered limited, and the impact of this matter has not been reflected in the revised medium-term management plan announced today. |
| Type of litigation or proceeding | Consultation with and filing of a report with the police concerning a suspected embezzlement case |
| Court or authority | The police station with jurisdiction in Chungcheongbuk-do, South Korea |
| Date of filing / date of action | 29 April 2026 (the date the Company consulted with and filed a report with the police) |
| Investigation structure | An internal investigation and inquiries with relevant parties. The Company has interviewed the employee and relevant parties, checked fund transfers and taken other steps, and the investigation is ongoing. |
| Measures to prevent recurrence | Review of the fund management framework and internal controls has commenced; formulation and thorough implementation of measures to prevent recurrence; strengthening of the management framework across the Group |
| Outlook | The Company will continue interviewing the employee and relevant parties and checking fund transfers. It will proceed with the formulation and thorough implementation of measures to prevent recurrence and strengthen the management framework across the Group. The total amount of improper expenditures may change. |
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.The employee withdrew deposits of the subsidiary without following the required approval procedures and used the funds for personal purposes.