Decision and Details
Submission of an improvement report to the Tokyo Stock Exchange
Sales and cost of sales had been recorded on the assumption that advertising placement orders existed, despite there being no such orders from the advertisers. The Tokyo Stock Exchange required the submission of an improvement report pursuant to Article 504, Paragraph 1, Item 1 of the Securities Listing Regulations.
Prior-period earnings reports and other filings were corrected. The corrections reduced sales, operating profit, profit attributable to owners of the parent, total assets and total equity.
| Item | Details |
|---|---|
| Matter Covered | Submission of an improvement report to the Tokyo Stock Exchange |
| Decision Date | 2 June 2026 |
| Implementation Date | 2 June 2026 (submitted) |
| Period Covered | The period covered by the corrections to prior-period financial results runs from the 39th fiscal year through the second quarter of the 42nd fiscal year. The investigation into the fictitious circular transactions generally covers fiscal 2017 through 31 March 2026. |
| Amount | Total sales requiring correction: negative ¥246.1 billion; total gross profit requiring correction: negative ¥49.9 billion; total external outflows: negative ¥32.9 billion. The impact of the corrections to prior-period financial results is presented for each period in terms of sales, operating profit, profit attributable to owners of the parent, total assets and total equity. |
| Quantity / scale | Approximately 190 consolidated subsidiaries, 36 personnel assigned to the improvement measures, and approximately 50 group companies subject to discussions with group-company CFOs |
| Impact on Business Performance | Prior-period earnings reports and other filings were corrected. The corrections reduced sales, operating profit, profit attributable to owners of the parent, total assets and total equity. |
| Reason | Sales and cost of sales had been recorded on the assumption that advertising placement orders existed, despite there being no such orders from the advertisers. The Tokyo Stock Exchange required the submission of an improvement report pursuant to Article 504, Paragraph 1, Item 1 of the Securities Listing Regulations. |
| Governing Rule | Article 504, Paragraph 1, Item 1, and Article 504, Paragraph 3 of the Securities Listing Regulations |
| Related previous disclosures | “Notice Regarding Submission of Correction Reports for Prior-Period Securities Reports and Other Filings and Corrections to Prior-Period Earnings Reports and Other Filings,” dated 31 March 2026; and “Receipt of the Investigation Report of the Special Investigation Committee Regarding Suspected Improper Transactions at a Consolidated Subsidiary of the Company and the Company’s Future Response,” dated 31 March 2026 |
| Future plans | The Company will implement and monitor the improvement measures in stages, including holding a risk review committee meeting in July 2026, establishing certain internal rules by the end of September 2026, launching the personnel rotation system and holding a risk management committee meeting in October 2026, and conducting self-audits by the end of December 2026. The advertising agency business involved in the fictitious circular transactions is not scheduled to resume. |
Items this document does not state (1)
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 sales and cost of sales had been recorded from fictitious circular transactions for which no advertising orders had been placed by advertisers, the Company corrected its prior-period financial results and, at the request of the Tokyo Stock Exchange, reported the circumstances and improvement measures. The Company identified insufficient knowledge of and sensitivity to risks in the advertising agency business, excessive reliance on individual employees, and inadequate subsidiary management, credit management and internal audits as causes of the issue.