Update : Sep. 13, 2013
[Tokyo Stock Exchange, Inc.]
TSE has taken the Public Announcement Measure and requested an Improvement Report as follows.
|1. Company Name||
ICHIKEN Co., Ltd.
(Code: 1847, Market Division: 1st Section)
|2.Date of Public Announcement Measure||Sep. 12, 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)
|3.Improvement Report Submission Deadline||Sep. 30, 2013 (Mon.)|
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 Sep. 9, 2013, ICHIKEN Co. Ltd. (hereinafter “the Company”) disclosed a report from a third-party inspection committee related to the inappropriate accounting practices of the Kansai branch of the Company. On Sep. 12, 2013, the Company disclosed revisions to earnings reports from past fiscal years.
The third-party inspection committee concluded in the report that the Company delayed recording construction costs by avoiding payment of such costs with the consent of the subcontractor, and reallocating them to separate contracts. As a result, the Company was found to have disclosed earnings information which contained false statements pertaining to material corporate information during the period from the 2nd quarter of the fiscal year ended March 2010 to the fiscal year ended March 2013.
It has been acknowledged that the construction section manager reallocated the construction costs, either himself or via subordinate managers, and that supervisors of the construction section, including the deputy branch manager, were aware of such facts. As such, it is deemed that the control system of such branch did not function effectively.
Based on the above, this case is deemed to (i) be in violation of the 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.
Furthermore, 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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