Update : Oct. 11, 2013
[Tokyo Stock Exchange, Inc.]
TSE has taken the Public Announcement Measure and requested an Improvement Report as follows.
|1. Company Name||
CREEK & RIVER Co., Ltd.
(Code: 4763, Market Division: JASDAQ Standard)
|2.Date of Public Announcement Measure||
Oct 10, 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||Oct 25, 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 Oct. 10, CREEK & RIVER Co., Ltd. (“the Company” hereinafter) disclosed revisions to its financial results in the past year, pertaining to the disclosure dated September 27, of the investigation report submitted by the internal investigation committee regarding inappropriate accounting practices of its consolidated subsidiary, Leading Edge Co., Ltd.
The report identified fictitious transactions including “round-tripping” conducted by Leading Edge Co., Ltd. and the Company was found to have made false disclosures of important corporate information, including financial results from the 2nd quarter of the fiscal year ended February 2012 to the 1st quarter of the fiscal year ending February 2014.
It has also been acknowledged that Leading Edge Co., Ltd. failed to include substantial checks of transaction details by managers in its regular operational framework, and that the Company did not conduct adequate monitoring. As such, the internal control/management system of Leading Edge Co., Ltd. and the group management framework of the Company were deemed to be insufficient.
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 impact 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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