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Jul. 27, 2022 TSE Cancellation of Designations as Securities on Alert and Securities Under Supervision (Examination): HyAS&Co.Inc.
The designations as Securities on Alert and Securities Under Supervision (Examination) have been cancelled as below.
*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: Growth Market) |
| ２．Date of Cancellation of Designation of Security on Alert | Jul. 28, 2022 (Thu.) |
| Provision | Securities Listing Regulations, Rule 503, Paragraph 7 (Due to falling under cases where the Exchange does not deem there to be any problem in the internal management system, etc. on the basis of the written confirmation of the internal management system resubmitted by the listed company) |
| ３．Date of Cancellation of Designation as Securities Under Supervision (Examination) | Jul. 28, 2022 (Thu.) |
| Provision | Securities Listing Regulations, Rule 601, Paragraph 1, Item (9), Sub-item e (Due to the Exchange not deeming that the internal management system, etc. did not improve on the basis of the written confirmation of the internal management system resubmitted by the listed company) |
| ４．Reason | HyAS&Co.Inc. (hereinafter "the Company") disclosed disclaimers of opinion on audit reports, etc. on Sep. 30, 2020 and the final investigation report of the third party committee concerning inappropriate accounting by the Company on Oct. 26, 2020, which revealed 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. 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. Having checked sources such as the written confirmation of internal management system which was submitted by the Company after one (1) year had elapsed since designation as a Security on Alert, TSE deemed that, in relation to the improvement plans disclosed on Sep. 17, 2021 by the Company, a certain level of measures had 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"), had resigned, while the ratio of equity interest of the Previous Executives had significantly decreased. However, TSE found that the following areas of the internal management system of the Company needed further work. As such, TSE deemed that it still needed to verify the Company's progress towards improvements in these areas in the future and decided to continue the stock's designation as a Security on Alert on Jan. 26, 2022, given that: - Following the resignation of the Previous Executives, the Company was operating under a situation where multiple current employees and ex-employees of the new parent company (hereinafter "persons related to the parent company") were assuming officer positions at the Company, and the Board of Directors, etc. had not carried out enough deliberations on related party transactions with the parent company group where the Company may have a conflict of interest. Also, there was an operational inadequacy whereby the Company did not appropriately update a list of the related parties (hereinafter "the related-party list") in 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, was insufficient initiatives aimed at raising compliance awareness among management executives. As a result, the Company still continued to operate under a situation where compliance awareness among officers and employees, the cornerstone of improving the internal management system, was not adequately nurtured or permeated. Now, having checked sources such as the written confirmation of internal management system which was resubmitted by the Company after one (1) year and six (6) months had elapsed since designation as a Security on Alert, TSE has deemed that the Company has responded to the points for which improvement was insufficient, including: - The composition of officers has been changed with those who are not persons related to the parent company being the majority, and the Company has developed a system that allows the Board of Directors to carry out enough deliberations on all related party transactions with the parent company group whereby deliberations are carried out after obtaining recommendations from an advisory committee comprised of third parties. - A checklist stipulating procedures for notification of internal rules, among other things, has been made, and the amended rules have been appropriately communicated. As a result, there is no operational inadequacy caused by a lack of awareness about the rules. - In addition, there have been improvements in each inadequacy identified through the examination, including those in the management of the related-party list and stamps, as well as the internal audit. - Training programs, etc. aimed at raising compliance awareness are provided on an ongoing basis, which has led to improvements in correcting each inadequacy as stated above. As such, no significant deficiency or misconduct attributable to insufficient or deficient compliance awareness among officers and employees has occurred since then. Besides the above, TSE also deems that the Company has established an appropriate internal management system and is operating it accordingly. As such, TSE has decided to cancel the designation of the stock of the Company as a Security on Alert since it does not deem there to be any problem in the internal management system, etc. of the Company. Together with this decision, it will cancel the stock's designation as a Security Under Supervision (Examination). |
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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