Receipt of the Investigation Report by the Special Investigation Committee Regarding Suspected Improper Transactions at the Company's Consolidated Subsidiaries and the Company's Future Response
BIGLOBE Inc. and G-PLAN Inc. (consolidated subsidiaries of KDDI Corporation)
Advertising agency business (G rep and B rep)
Insufficient knowledge of and risk sensitivity to the advertising agency business, excessive reliance on individuals and ineffective checks and balances, and inadequate segregation of duties, verification of transaction existence, credit management, internal auditing, and subsidiary management systems. The two employees involved were the direct perpetrators.
Company response
All transactions related to the advertising agency business with business partners suspected of involvement in the fictitious circular transactions
A special investigation committee comprising external attorneys and certified public accountants was established on 14 January 2026. The committee is chaired by Natori Toshiya (名取俊也), with Hen Seiyu (辺誠祐) and Sato Yasunori (佐藤保則) as members. The investigation period is from 14 January to 31 March 2026.
1. Strengthen business partner management across the KDDI Group (review standards for business partner and credit management, rebuild the monitoring framework, and conduct regular operational reviews) 2. Strengthen segregation of duties in procurement and optimize acceptance inspections across the KDDI Group (ensure clear segregation of duties in procurement processes, identify risks arising from excessive reliance on individuals, and address them) 3. Strengthen risk management and cash flow management for new businesses across the KDDI Group (improve the effectiveness of risk analysis and mitigation when launching or expanding businesses, strengthen monthly profitability management and cash flow management, and strengthen business management by dispatched officers and increase opportunities for communication) 4. Strengthen checks and balances and audit functions at KDDI Group companies and financial management at group-financed entities (raise awareness of and promote use of internal reporting systems, including at subsidiaries; strengthen internal audit structures; review risk assessment methods used in internal audits and provide training to enhance professional skepticism; and strengthen the review process for group financing and the process for confirming financial conditions) 5. Embed and continuously implement measures to prevent recurrence across the KDDI Group (establish a meeting to strengthen group governance, embed and monitor measures to prevent recurrence, and provide regular reports to the Board of Directors through the Risk Management Committee) 6. Foster high ethical standards and a sound corporate culture (continue activities to instill the principles of the KDDI Philosophy and introduce an education program addressing fraud risks) 7. Consider group management strategies to strengthen group governance (deepen shared understanding with Group companies and strengthen mutual trust, and review the role and functions of officers dispatched to Group companies)
The representative director and president, director and senior executive officer and CFO, director and senior executive officer, and audit & supervisory board member of BIGLOBE will resign. The representative director and president and director and vice president of G-PLAN will resign. KDDI's representative director and chairman and representative director, president and CEO will return 30% of their monthly compensation for 3 months; the director, senior executive officer and CFO and director and senior executive officer will return 20% for 3 months; and other officers and relevant individuals will return 10% to 20% of their monthly compensation for 1 to 2 months. The two employees involved will be dismissed as a disciplinary measure.
Revenue decreased by ¥246.1 billion, operating profit decreased by ¥150.8 billion, profit for the period attributable to owners of the parent decreased by ¥129.0 billion, total assets decreased by ¥153.8 billion, and total equity decreased by ¥129.0 billion. The ¥32.9 billion in funds that flowed outside the Group was recorded under other expenses.
Prior to the fiscal year ended March 2023, the fiscal year ended March 2024, the fiscal year ended March 2025, and the cumulative third quarter of the fiscal year ending March 2026
Payments from certain advertising agencies to G-PLAN were delayed in mid-December 2025 (amount: Not disclosed)
The Company will implement measures to prevent recurrence in stages and work to strengthen governance across the Group and restore trust. It will file amended reports for prior-period securities reports and other filings and amend its earnings summary.
| Item | Details |
|---|---|
| Event name | Receipt of the Investigation Report by the Special Investigation Committee Regarding Suspected Improper Transactions at the Company's Consolidated Subsidiaries and the Company's Future Response |
| Date of occurrence | From August 2018 through December 2025 (the period during which the fictitious circular transactions took place) |
| Date recognized / date notice received | Mid-December 2025 (the employees involved admitted their conduct after delays in payments from certain advertising agencies) |
| Subject Entity | BIGLOBE Inc. and G-PLAN Inc. (consolidated subsidiaries of KDDI Corporation) |
| Target Locations / Products | Advertising agency business (G rep and B rep) |
| Cause | Insufficient knowledge of and risk sensitivity to the advertising agency business, excessive reliance on individuals and ineffective checks and balances, and inadequate segregation of duties, verification of transaction existence, credit management, internal auditing, and subsidiary management systems. The two employees involved were the direct perpetrators. |
| Amount of Impact on Business Performance | Revenue decreased by ¥246.1 billion, operating profit decreased by ¥150.8 billion, profit for the period attributable to owners of the parent decreased by ¥129.0 billion, total assets decreased by ¥153.8 billion, and total equity decreased by ¥129.0 billion. The ¥32.9 billion in funds that flowed outside the Group was recorded under other expenses. |
| Accounting period in which recognized | Prior to the fiscal year ended March 2023, the fiscal year ended March 2024, the fiscal year ended March 2025, and the cumulative third quarter of the fiscal year ending March 2026 |
| Amount of receivables at risk of non-collection or delayed collection | Payments from certain advertising agencies to G-PLAN were delayed in mid-December 2025 (amount: Not disclosed) |
| Suspended operations | All transactions related to the advertising agency business with business partners suspected of involvement in the fictitious circular transactions |
| Investigation structure | A special investigation committee comprising external attorneys and certified public accountants was established on 14 January 2026. The committee is chaired by Natori Toshiya (名取俊也), with Hen Seiyu (辺誠祐) and Sato Yasunori (佐藤保則) as members. The investigation period is from 14 January to 31 March 2026. |
| Measures to prevent recurrence | 1. Strengthen business partner management across the KDDI Group (review standards for business partner and credit management, rebuild the monitoring framework, and conduct regular operational reviews) 2. Strengthen segregation of duties in procurement and optimize acceptance inspections across the KDDI Group (ensure clear segregation of duties in procurement processes, identify risks arising from excessive reliance on individuals, and address them) 3. Strengthen risk management and cash flow management for new businesses across the KDDI Group (improve the effectiveness of risk analysis and mitigation when launching or expanding businesses, strengthen monthly profitability management and cash flow management, and strengthen business management by dispatched officers and increase opportunities for communication) 4. Strengthen checks and balances and audit functions at KDDI Group companies and financial management at group-financed entities (raise awareness of and promote use of internal reporting systems, including at subsidiaries; strengthen internal audit structures; review risk assessment methods used in internal audits and provide training to enhance professional skepticism; and strengthen the review process for group financing and the process for confirming financial conditions) 5. Embed and continuously implement measures to prevent recurrence across the KDDI Group (establish a meeting to strengthen group governance, embed and monitor measures to prevent recurrence, and provide regular reports to the Board of Directors through the Risk Management Committee) 6. Foster high ethical standards and a sound corporate culture (continue activities to instill the principles of the KDDI Philosophy and introduce an education program addressing fraud risks) 7. Consider group management strategies to strengthen group governance (deepen shared understanding with Group companies and strengthen mutual trust, and review the role and functions of officers dispatched to Group companies) |
| Directors' and officers' liability | The representative director and president, director and senior executive officer and CFO, director and senior executive officer, and audit & supervisory board member of BIGLOBE will resign. The representative director and president and director and vice president of G-PLAN will resign. KDDI's representative director and chairman and representative director, president and CEO will return 30% of their monthly compensation for 3 months; the director, senior executive officer and CFO and director and senior executive officer will return 20% for 3 months; and other officers and relevant individuals will return 10% to 20% of their monthly compensation for 1 to 2 months. The two employees involved will be dismissed as a disciplinary measure. |
| Outlook | The Company will implement measures to prevent recurrence in stages and work to strengthen governance across the Group and restore trust. It will file amended reports for prior-period securities reports and other filings and amend its earnings summary. |
Items this document does not state (11)
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.Two employees involved conducted fictitious advertising transactions by making it appear that they had been commissioned by advertisers, although no such commissions actually existed. The Company identified insufficient knowledge of and risk sensitivity to the advertising agency business, excessive reliance on individuals, inadequate segregation of duties and verification of the existence of transactions, and deficiencies in subsidiary management and internal auditing as factors that allowed the transactions to arise and continue.