Sep. 11, 2019 TSE
Public Announcement Measure and Request for Improvement Report: MTG Co.,Ltd.
TSE has taken the Public Announcement Measure and requested an Improvement Report as follows.
*This decision is based on the results of the examination by Japan Exchange Regulation.
| １．Company Name |
MTG Co.,Ltd.
(Code: 7806, Market Division: Mothers) |
| ２．Date of Public Announcement Measure |
Sep. 6, 2019 (Fri.) |
| Provision |
Securities Listing Regulations, Rule 508, Paragraph 1, Item 1
(Due to disclosed information containing false statements and public announcement being deemed necessary) |
| ３．Improvement Report Submission Deadline |
Sep. 24, 2019 (Tue.) |
| Provision |
Securities Listing Regulations, Rule 502, Paragraph 1, Item 1
(Due to disclosed information containing false statements and improvements being deemed highly necessary) |
| ４．Reason |
On Jul. 12, MTG Co.,Ltd. (hereinafter "the Company") disclosed an investigation report of the third-party committee concerning inappropriate accounting treatment and other matters by the Company and corrections to past earnings reports, etc.
These disclosures revealed that, in order to meet the disclosed earnings forecast, the Company posted sales based only on deliveries and without fulfilling the requirements to post sales, and that the Company provided false explanations to the Company's accounting auditor in order to prevent such facts from being detected. As a result, the Company was deemed to have disclosed earnings reports, etc. that contained falsehoods from the fiscal year ended Sep. 2018 through to the second quarter of the fiscal year ending Sep. 2019.
It was deemed that the following points contributed to the occurrence of these disclosures:
- The function of the Company's administrative division was continuously neglected as evidenced by such facts as that business divisions and the Company's subsidiary, which the then executive director was in charge of, gave priority to posting sales over taking approval process specified in the internal rules when starting a new transaction, and that, although the transaction value was clearly large for the Company, the necessary information, such as an overview of the transaction and the terms of the contract, was not appropriately shared with the Company's administrative division in a timely manner.
- The control by the Company's administrative division was disabled as evidenced in such actions by the then executive officer and director of Administration Department and others taking part in providing false explanations for the accounting auditor in line with the then executive director's intent despite the fact that the Company's accounting division became aware of such false explanations given by said executive director, etc. for the accounting auditor afterward.
- There was low awareness of compliance given that the Company's president overlooked the fact that he received explanations that hinted at the false explanations provided to the accounting auditor.
Based on the above, this case is in violation of the listing rules due to the disclosure containing false statements, has considerable impact on investment decisions, and is deemed to require public announcement. Thus, TSE implements the public announcement measure.
Furthermore, this is a case of inappropriate disclosure arising from deficiencies in the Company's organizational structure for conducting appropriate timely disclosure, and improvements to such organizational structure are deemed to remain highly necessary. As such, TSE requires the Company to submit a report containing the background of the issue and improvement measures. |
DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice. Tokyo Stock Exchange, Inc. and/or Japan Exchange Regulation shall individually or jointly accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes with regard to this translation.
Enquiry
Tokyo Stock Exchange, Inc. Listing Department, Corporate Disclosure Office, Planning & Coordination, Listed Company Services
TEL:+81-3-3666-0141(Switchboard)
Close