Worth reading
77Important
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
28
Funds properly accounted for as financial transactionsWording
Avoiding a definitive answer
How definitive the wording is.Decision and Details
The extraordinary meetings of the boards of directors of the Company, WeCapital株式会社 and ヤマワケエステート株式会社 (resolution to establish the Internal Investigation Committee)Receipt of the investigation report from the Internal Investigation Committee
Decision15 June 2026
Period CoveredOctober 2023 through the end of March 2026, although certain transactions from April 2026 onward and electronic data from before the review period were also examined
ImplementationInvestigation report received late at night on 31 August 2026 (completed)
Going forwardThe Company will determine its future response by 14 September 2026 and make a timely disclosure. It will conduct verification and discussions with the audit firm before the earnings report for the third quarter of the fiscal year ending October 2026, scheduled for mid-September. If the concerns cannot be dispelled, among other circumstances, the Company will proceed with corrections to the interim report and prior annual securities reports. It will also urgently proceed with considering and formulating measures to prevent recurrence.
AmountImpact for fiscal 2024: revenue down ¥5,290 million, purchases down ¥4,454 million, gross profit down ¥835 million, and interest income of ¥847 million; impact for the cumulative first half of fiscal 2025: revenue down ¥2,909 million, purchases down ¥2,177 million, gross profit down ¥733 million, and interest income of ¥657 million
Quantity / scale251 funds under review, 28 funds determined to have been properly accounted for as financial transactions, 284,354 data items subject to forensic investigation, and 1,710 data items subject to review
Reason
The repurchase transactions may not have been accounted for appropriately under the accounting standards for revenue recognition and other applicable standards. The investigation was conducted to confirm the economic substance of the transactions, their accounting treatment, and their impact on the financial statements.
Impact on Business Performance
Prior-period financial results will likely need to be restated. However, the exact figures must be determined through an audit by the audit firm and are currently presented as reference figures. If the concerns cannot be dispelled, among other circumstances, the Company expects to take corrective action with respect to the interim report for the fiscal year ending October 2026 and prior annual securities reports.
| Item | Details |
|---|---|
| Matter Covered | Receipt of the investigation report from the Internal Investigation Committee |
| Decision-Making Body | The extraordinary meetings of the boards of directors of the Company, WeCapital株式会社 and ヤマワケエステート株式会社 (resolution to establish the Internal Investigation Committee) |
| Decision Date | 15 June 2026 |
| Implementation Date | Investigation report received late at night on 31 August 2026 (completed) |
| Period Covered | October 2023 through the end of March 2026, although certain transactions from April 2026 onward and electronic data from before the review period were also examined |
| Amount | Impact for fiscal 2024: revenue down ¥5,290 million, purchases down ¥4,454 million, gross profit down ¥835 million, and interest income of ¥847 million; impact for the cumulative first half of fiscal 2025: revenue down ¥2,909 million, purchases down ¥2,177 million, gross profit down ¥733 million, and interest income of ¥657 million |
| Quantity / scale | 251 funds under review, 28 funds determined to have been properly accounted for as financial transactions, 284,354 data items subject to forensic investigation, and 1,710 data items subject to review |
| Impact on Business Performance | Prior-period financial results will likely need to be restated. However, the exact figures must be determined through an audit by the audit firm and are currently presented as reference figures. If the concerns cannot be dispelled, among other circumstances, the Company expects to take corrective action with respect to the interim report for the fiscal year ending October 2026 and prior annual securities reports. |
| Reason | The repurchase transactions may not have been accounted for appropriately under the accounting standards for revenue recognition and other applicable standards. The investigation was conducted to confirm the economic substance of the transactions, their accounting treatment, and their impact on the financial statements. |
| Governing Rule | Tokyo Stock Exchange Securities Listing Regulations Enforcement Rules, Article 405, paragraph 2; Accounting Standard No. 29, "Accounting Standard for Revenue Recognition," paragraphs 35–41; Guidance on Accounting Standard for Revenue Recognition, No. 30, paragraphs 39–47 and 69–74, and paragraph 153 of the Basis for Conclusions |
| Related previous disclosures | 15 June 2026, "Notice Regarding Disclaimer of Review Conclusion on the Interim Report for the Fiscal Year Ending October 2026"; 15 June 2026, "Notice Regarding Establishment of an Internal Investigation Committee"; 10 August 2026, "Notice Regarding the Status of the Investigation by the Internal Investigation Committee"; 24 August 2026, "Notice Regarding the Policy for Formulating an Improvement Plan"; 31 August 2026, "Notice Regarding the Investigation Report from the Internal Investigation Committee"; 31 August 2026, "Notice Regarding the Change in a Consolidated Subsidiary (Transfer of Shares and Removal from Consolidation) and Withdrawal from the Crowdfunding Business by the Consolidated Subsidiary" |
| Future plans | The Company will determine its future response by 14 September 2026 and make a timely disclosure. It will conduct verification and discussions with the audit firm before the earnings report for the third quarter of the fiscal year ending October 2026, scheduled for mid-September. If the concerns cannot be dispelled, among other circumstances, the Company will proceed with corrections to the interim report and prior annual securities reports. It will also urgently proceed with considering and formulating measures to prevent recurrence. |
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The audit firm raised concerns regarding the appropriateness and completeness of the accounting treatment for real estate transactions subject to repurchase agreements. The investigation was conducted to examine the facts underlying those concerns and their impact on the financial statements.
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