Update : May 19, 2014
[Tokyo Stock Exchange, Inc.]
TSE has imposed a listing agreement violation penalty and requested an Improvement Report as follows.
|1. Company Name||
Japan Asset Marketing Co., Ltd.
(Code: 8922, Market Division: Mothers)
|2. Listing Agreement Violation Penalty Total||JPY 10 million|
Securities Listing Regulations, Rule 509, Paragraph 1, Item 1
(Due to falling under a case where TSE deems that the listed company has been in violation of the matters to be observed when conducting disclosure and that such listed company has undermined shareholder and investor confidence in the TSE market)
|3. Improvement Report Submission Deadline||May 29, 2014 (Thu.)|
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)
Japan Asset Marketing Co., Ltd. (hereinafter "the Company") disclosed an investigative report of a third party committee regarding inappropriate accounting processing and an outline of amended earnings reports on Mar. 28, 2014, and subsequently disclosed amended earnings reports for the previous fiscal years on Apr. 24, 2014.
These disclosures revealed that in software sales for JPY 40 million conducted immediately prior to the end of the fiscal year, an intermediary pertaining to such sales did not substantially provide services and the majority of the JPY 20 million in fees the Company paid to the intermediary from the sales proceeds was returned on the same day to the buyer, leading to excessive accounting of sales. The Company's consolidated sales for the fiscal year ended Mar. 2012 fell below JPY 100 million, leading to the possibility of the Company falling under the Mothers delisting criterion for sales. It has become clear that the Company's consolidated sales for the fiscal year ended Mar. 2012 were JPY 83 million, and not JPY 103 million.
It has been deemed that, under the weak business management framework of the Company, the then representative director held excessive authority and performed the above actions to maintain the Company's listing despite the possibility that such director was plainly aware that the accounting practices were improper, and that such director was severely lacking in awareness of compliance. Furthermore, contracts with new parties were not subject to an approval process in the company's rules at the time, and no decision or report was made in a significant meeting regarding the matter. Additionally, statutory and internal auditing did not function sufficiently.
Following a capital/business partnership the Company entered into with another company in Mar. 2013, all directors at the time resigned, a large number of employees were added, and the business of the Company changed significantly.
Taking these facts into comprehensive consideration, it has been deemed that the Company conducted improper disclosure resulting in it falling under the delisting criteria due to insufficiencies in the Company's disclosure framework. The timely disclosure framework of the Company is deemed to be in high need of improvement. As such, TSE has determined it is appropriate for the Company to submit a report containing the background of the matter and improvement measures, and subject such report to public inspection.
Additionally, even though the then representative director performed this action to maintain the Company's listing despite the possibility that such director was plainly aware of the improper recording of sales, and the scale of this amendment is limited, because the amendment resulted in the Company falling under the delisting criteria in the fiscal year ended Mar. 2012, which TSE deems to have harmed investor confidence in the exchange market, TSE shall also impose a listing agreement violation penalty on the Company.
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