Settlement of Civil Mediation Regarding the Damages Claim Against the Former Representative Director and President and Policy on Pursuing Liability Against Other Officers at the Time
LUCKLAND CO.,LTD. (the filing company), former Representative Director and President Mochizuki Keiichiro (望月圭一郎), and other officers at the time
The expense reimbursement matter, in which Mochizuki's expense reimbursement applications contained information that differed from the facts, and the receivables collection matter, in which inappropriate processing was carried out, including disguising the repayment of long-term accounts receivable as if it were taking place, both came to light following findings and other matters arising from a tax inspection by the Tokyo Regional Taxation Bureau.
¥130 million (expected to be recognized as an extraordinary gain)
Third-quarter consolidated accounting period of the fiscal year ending December 2026 (1 July 2026 to 30 September 2026)
The company will promptly disclose any revisions to its earnings forecasts or other matters requiring disclosure that arise in light of the receipt of the settlement payment and other circumstances.
Related procedures
Civil mediation
Tokyo District Court
Total: ¥1,157,026,236 (damages claim amount)
Company response
A special investigation committee established on 14 February 2024. The investigation report was received on 12 April 2024. In the civil mediation, the court established a mediation committee.
The 14 measures specified in the Improvement Report, including establishing rules for officers' expense reimbursements, revising regulations concerning related-party transactions and conflict-of-interest transactions, strengthening the Internal Audit Office, and enhancing the functions of the internal whistleblowing hotline.
Mochizuki's resignation as Representative Director and retirement as a director, and the retirement of 9 of the 10 directors at the time at the 54th Annual General Meeting of Shareholders held on 30 August 2024. The company will not seek damages from the other officers at the time or the heirs of the deceased former director, conditional on receiving full payment of the settlement amount from Mochizuki.
Mochizuki will make a lump-sum payment of ¥130 million by 30 October 2026. If the full amount is not paid by the deadline, the company will reconsider whether to pursue liability against the other officers at the time. The company will continue implementing measures to prevent recurrence and strengthening its internal control and governance frameworks.
The company will promptly disclose any revisions to its earnings forecasts or other matters requiring disclosure that arise in light of the receipt of the settlement payment and other circumstances.
| Item | Details |
|---|---|
| Event name | Settlement of Civil Mediation Regarding the Damages Claim Against the Former Representative Director and President and Policy on Pursuing Liability Against Other Officers at the Time |
| Date of occurrence | 17 September 2026 (the date on which the mediation was settled) |
| Subject Entity | LUCKLAND CO.,LTD. (the filing company), former Representative Director and President Mochizuki Keiichiro (望月圭一郎), and other officers at the time |
| Cause | The expense reimbursement matter, in which Mochizuki's expense reimbursement applications contained information that differed from the facts, and the receivables collection matter, in which inappropriate processing was carried out, including disguising the repayment of long-term accounts receivable as if it were taking place, both came to light following findings and other matters arising from a tax inspection by the Tokyo Regional Taxation Bureau. |
| Amount of Impact on Business Performance | ¥130 million (expected to be recognized as an extraordinary gain) |
| Accounting period in which recognized | Third-quarter consolidated accounting period of the fiscal year ending December 2026 (1 July 2026 to 30 September 2026) |
| Impact on Earnings Forecast | The company will promptly disclose any revisions to its earnings forecasts or other matters requiring disclosure that arise in light of the receipt of the settlement payment and other circumstances. |
| Type of litigation or proceeding | Civil mediation |
| Court or authority | Tokyo District Court |
| Date of filing / date of action | 24 December 2024 (the date the civil mediation petition was filed with the Tokyo District Court) |
| Claim amount / surcharge amount | Total: ¥1,157,026,236 (damages claim amount) |
| Investigation structure | A special investigation committee established on 14 February 2024. The investigation report was received on 12 April 2024. In the civil mediation, the court established a mediation committee. |
| Measures to prevent recurrence | The 14 measures specified in the Improvement Report, including establishing rules for officers' expense reimbursements, revising regulations concerning related-party transactions and conflict-of-interest transactions, strengthening the Internal Audit Office, and enhancing the functions of the internal whistleblowing hotline. |
| Directors' and officers' liability | Mochizuki's resignation as Representative Director and retirement as a director, and the retirement of 9 of the 10 directors at the time at the 54th Annual General Meeting of Shareholders held on 30 August 2024. The company will not seek damages from the other officers at the time or the heirs of the deceased former director, conditional on receiving full payment of the settlement amount from Mochizuki. |
| Outlook | Mochizuki will make a lump-sum payment of ¥130 million by 30 October 2026. If the full amount is not paid by the deadline, the company will reconsider whether to pursue liability against the other officers at the time. The company will continue implementing measures to prevent recurrence and strengthening its internal control and governance frameworks. |
| Planned follow-up disclosure | The company will promptly disclose any revisions to its earnings forecasts or other matters requiring disclosure that arise in light of the receipt of the settlement payment and other circumstances. |
Items this document does not state (9)
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 amount calculated by the court's mediation committee based on the arguments of both parties is reasonable, while the likelihood of obtaining damages exceeding ¥130 million, even if the matter proceeds to litigation, is low. Litigation would also require considerable time and expense. Other reasons include the expectation of early and certain recovery through a lump-sum payment by a specified deadline, the lack of any expected increase in the total amount recovered from pursuing claims against the other officers at the time, and the fact that measures to improve internal controls and governance have already been implemented.