Improper Expenditures and Kickbacks in New Store Construction

「As stated in the “Notice Regarding Receipt of the Investigation Report from the Special Investigation Committee” dated 29 August 2022, it was discovered that an employee of the company, who was subject to disciplinary dismissal on 28 September 2022, had made improper expenditures and had received kickbacks from the company's business partners.」

「As disclosed in the timely disclosure dated 29 August 2022, “Notice Regarding Receipt of the Investigation Report from the Special Investigation Committee,” concerning the case involving improper expenditures and other matters related to construction work for our new stores, we take the situation seriously and are formulating specific measures to prevent recurrence in line with the findings and recommendations of the special investigation committee, while working thoroughly to prevent recurrence. During the cumulative second quarter of the current fiscal year, ¥170 million in investigation costs related to the case incurred by the special investigation committee was recognized as an extraordinary loss.」

「It was discovered that improper expenditures had been made in connection with construction work for our new stores. To conduct a fair and appropriate investigation, we established a special investigation committee comprising external experts and recognized the committee's investigation costs as special investigation expenses.」

「As a result, it was found that, in construction work for several of our stores, our employees had instructed contractors to place fictitious orders and reallocate construction costs, resulting in improper expenditures, and had received kickbacks from our business partners through payments of fictitious brokerage and planning fees.」