It was reported that a shareholder of GungHo Online Entertainment had filed a lawsuit seeking payment of ¥356 million plus damages for delay from current Chairman Morishita Kazuki (森下一喜), based on an alleged breach of the duty to maintain an internal control system concerning misconduct by a former employee.
On 2 November 2026, GungHo announced that it had received a demand from a shareholder to file a liability action against Morishita Kazuki (森下一喜), its current Chairman of the Board and Chief Development Officer. The demand letter was reportedly delivered to the company’s audit & supervisory board members on 30 October 2026. The purpose of the action is to seek payment of ¥356 million plus damages for delay from Morishita, based on an alleged breach of the duty to establish an internal control system in response to misconduct by a former employee disclosed in August 2025.
The former employee allegedly misappropriated most of the outsourcing fees through fictitious orders. Total losses were approximately ¥246 million, with funds allegedly diverted through fraudulent payments to business partners for outsourcing services that were never actually performed. In response, the company dismissed the former employee for disciplinary reasons and concluded through its internal investigation that the misconduct had been carried out alone. At the same time, it introduced measures to prevent recurrence, citing the concentration of authority and deficiencies in its approval and internal audit processes as causes. It also reduced the monthly base remuneration of its Representative Director and President by 30% for 3 months.
Regarding the demand to file the action, the audit & supervisory board members stated that they would investigate the details, consider their response and notify the parties promptly once they had decided whether to bring the action.