Tabikobo, during corrective audit procedures related to fraudulent transactions, discovered a case suspected of fraud. As a result, it will postpone the release of its earnings report and is considering extending the filing deadline for the Annual Securities Report stipulated under Japan’s Financial Instruments and Exchange Act. Its parent company, Adventure, will take the same measures.
According to Tabikobo, in a sales sample test of the Corporate Sales Division for the fiscal year ended March 2021 conducted as part of the audit firm’s corrective audit procedures, a case was identified that differs from the methods detected by the Special Investigation Committee and is suspected to be fraudulent. Specifically, there is suspicion that gift certificates not ordered by clients were procured as part of cost of goods sold, then converted to cash and embezzled. The company judged it highly likely that emails were spoofed/altered and used as transactional evidence to make it appear as though orders had been placed by business partners.
Based on the verification of documents and other evidence to date, the suspicion likely involves a specific individual, and no involvement by current or past management has been identified. Given the need for a swift investigation, the company has set up an in-house self-inspection team. From within the company, Director and Executive Officer Hirofumi Asai (transferred from his position as Representative Director, President and Executive Officer as of September 25) and two other executive officers will participate, and the company will also obtain assistance from external accounting and legal experts. They will investigate this case as well as whether similar cases exist.
The company had established a Special Investigation Committee primarily composed of external experts to examine the applications for government subsidies it received between March 2020 and November 2022, namely Japan’s Employment Adjustment Subsidy and Emergency Employment Stabilization Subsidy. During the investigation, it was found that inappropriate recognition of software assets had occurred, and that a specific former employee of the Corporate Sales Division had, from at least around June 2017 to around May 2020, deferred losses from travel arrangement errors by methods such as reclassifying procurement, recording fictitious transactions, the fraudulent acquisition and cashing of vouchers, and disguising incoming payments. Although the company received the investigation results on August 29, additional separate cases suspected of fraudulent transactions were discovered during the audit related to restating prior years’ financial statements based on those results.
Because the subsidiary Tabikobo has not completed its closing procedures, the parent company Adventure will also postpone the release of its earnings report and consider extending the filing deadline for the Annual Securities Report. For both companies, the original filing deadline for the Annual Securities Report was September 30.
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