Update : Mar. 18, 2013
[Tokyo Stock Exchange, Inc.]
TSE has cancelled the designation of Securities Under Supervision (Confirmation), as well as taken the Public Announcement Measure and requested an Improvement Report as follows.
|1. Issue Name||
Meiji Machine Co.,Ltd. stocks
(Code: 6334, Market Division: 2nd Section)
|2. Cancellation of Designation of Securities Under Supervision (Confirmation)|
|(1) Date of Cancellation of Designation of Securities Under Supervision (Confirmation)||Mar. 15, 2013 (Fri.)|
Securities Listing Regulations, Rule 601, Paragraph 1, Item 10
(due to deeming as not falling under a delay in submission of the quarterly report)
TSE designated the stock of Meiji Machine Co., Ltd. (hereinafter, the "Company") as Securities Under Supervision (Confirmation) because the Company had disclosed on Feb. 13, 2013 (Wed.) that the quarterly report would not be submitted by the deadline (Feb. 14, 2013 (Thu.)).
On Mar. 14, 2013 (Thu.), TSE confirmed the submission of the report by the Company. As such, the designation of Securities Under Supervision (Confirmation) will be cancelled for the Company's stock as of Mar. 15, 2013 (Fri.).
|3. Public Announcement Measure and Request for Improvement Report|
|(1) Date of Public Announcement Measure||Mar. 14, 2013 (Thu.)|
Securities Listing Regulations, Rule 508, Paragraph 1, Item 1
(Due to a public announcement being deemed necessary in cases where TSE has recognized a violation of the matters to be observed when conducting disclosure)
|(2) Improvement Report Submission Deadline||Mar. 29, 2013 (Fri.)|
Securities Listing Regulations, Rule 502, Paragraph 1, Item 1
(Due to improvements being deemed highly necessary in cases where TSE has recognized a violation of the matters to be observed when conducting disclosure)
On Feb. 15, 2013, the Company disclosed results of the investigation by a third-party investigation committee into inappropriate accounting at a consolidated subsidiary. On Mar. 11, 2013, the Company disclosed that it was planning to amend past earnings reports and provided a summary of such amendments. In addition, on Mar. 14, 2013, the Company disclosed amendments to past earnings reports.
In the disclosed documents, the Company was found to have disclosed earnings information requiring material amendments for the period ending March 2008 through the second quarter of the period ending March 2013, which were caused by acts such as the inclusion of fictitious sales and reduction in sales costs resulting from inappropriate cost switching at the subsidiary.
This is a case of inappropriate accounting that resulted from several persons, including a former officer, of the subsidiary preparing documents of fictitious content, and explaining such falsified content to the auditing firm, among others. As such, TSE deemed this to be a situation where the Company's management system and framework for its subsidiaries were inadequate.
Based on the above, this case is deemed to (i) be in violation of matters to be observed related to timely disclosure, (ii) have considerable influence on investment decisions and (iii) require public announcement. Thus, TSE shall implement public announcement measures.
Moreover, this is a case of inappropriate disclosure arising from deficiencies in the Company’s organizational structure for conducting timely disclosure, and improvements to the organizational structure are deemed highly necessary. As such, TSE shall require the Company to submit a report containing the background of the issue and improvement measures.
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