Market News
Jan. 31, 2022 TSE Continued Designation as Security on Alert: HyAS&Co.Inc.
The following issue will continue to be designated as Security on Alert.
*This decision is based on the results of the examination by Japan Exchange Regulation.
| １．Issue Name | HyAS&Co.Inc. stock (Code: 6192, Market Division: Mothers) |
| ２．Date of Decision | Jan. 26, 2022 (Wed.) |
| Provision | Securities Listing Regulations, Rule 501, Paragraph 4, Item 2 (Due to falling under cases where the Exchange deems that there is a problem in the internal management system, etc. of the listed company on the basis of the written confirmation of internal management system submitted by such listed company) |
| ３．Reason | HyAS&Co.Inc. (hereinafter "the Company") disclosed corrections to past quarterly earnings reports, etc. and disclosed about disclaimers of opinion on audit reports, etc. on Sep. 30, 2020. The Company subsequently disclosed the final investigation report of the third party committee concerning inappropriate accounting by the Company on Oct. 26, 2020. Based on these, it was found that the Company had committed a breach of matters sworn in the written oaths pertaining to applications for initial listing and a change in the listing market. Given this breach, TSE deemed that improvement of the internal management system, etc. of the Company was highly necessary, and designated its stock as a Security on Alert on Nov. 27, 2020. TSE has checked the written confirmation of internal management system submitted by the Company after one (1) year elapsed since designation as a Security on Alert. As a result, TSE recognizes that, in relation to the improvement plans disclosed on Sep. 17, 2021 by the Company, a certain level of measures have been taken: for example, all of the Company's management executives who were involved in the problematic acts that triggered the designation as a Security on Alert or other similar acts, or failed to appropriately prevent the problems from happening (hereinafter the "Previous Executives"), have resigned, while the ratio of equity interest of the Previous Executives has significantly decreased. However, TSE found that the following areas of the internal management system of the Company need further work. As such, TSE deemed that it still needs to verify the Company's progress towards improvements in these areas in the future. - Following the resignation of the Previous Executives, the Company is operating under a situation where multiple current employees and ex-employees of the new parent company are assuming officer positions at the Company, and the Board of Directors, etc. has not carried out enough deliberations on related party transactions with the parent company group with which the Company may have a conflict of interest. Also, there is an operational inadequacy whereby the Company does not appropriately update a list of the related parties in the scope. - Regarding the establishment of internal rules, the Company did not communicate revisions of various rules for months, during which multiple internal approvals were inappropriately processed outside the grounds of authority stipulated by the amended administrative authority rules. - When the Company performed stamp management as part of improvement measures implemented under the improvement plan to prevent invalidation of internal control by management, the Company did not appropriately manage the key of a security box, which led to persons other than the normal responsible person using the stamp without authorization. - The Company did not perform an internal audit to check the execution status of the improvement plan within the period laid out by the improvement plan. - The background of each inadequacy identified through the examination, including the above, is insufficient initiatives aimed at raising compliance awareness among management executives. As a result, the Company still continues to operate under a situation where compliance awareness among officers and employees, the cornerstone of improving the internal management system, is not adequately nurtured or permeated. Based on the above, because the situation falls under cases where TSE deems that there is a problem in the internal management system, etc., TSE has decided to continue the stock's designation as a Security on Alert. If, on or after the date (May 27, 2022) on which one (1) year and six (6) months elapse from the designation as a Security on Alert, TSE deems that the internal management system, etc. of the Company has not improved upon reviewing the situation, including the contents of the written confirmation of internal management system to be resubmitted by the Company, then the stock of the Company shall be delisted. |
Current Designations of Securities on Alert
Designation History of Designation of Securities on Alert
Designation History of Designation of Securities on Alert
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.
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