Kanebo Ltd. might file a criminal complaint against its former management for allegedly window-dressing its financial statements for fiscal 2001 and 2002, President Akiyoshi Nakajima said Thursday.
An in-house investigation team has found that the former management, including Takashi Hoashi, who led Kanebo until March, cooked the books for the two business years in an apparent violation of the Securities and Exchange Law, company officials said.
Hoashi, who was both former chairman and president, and other executives padded the troubled company’s sales and profits, they said.
The former managers allegedly asked sales employees to inflate sales figures and be aggressive in supplying clients with products, including cosmetics and textiles, even if they did not want them. The products then were returned to the company after the start of the new business year, the officials said.
“Even though (the window-dressing) was done by some of our former executives, we apologize that such acts were committed,” Nakajima told a news conference.
Kanebo is now under reconstruction with help from the Industrial Revitalization Corp. of Japan.
The company posted a group net profit of 70 million yen in fiscal 2001, rising to 500 million yen the following year. But it suffered a massive net loss of 357.6 billion yen in fiscal 2003 after the IRJC assessed its financial results.
The former management led by Hoashi resigned after canceling a plan to sell the firm’s cosmetics business to Kao Corp. in February.
In April, Nakajima set up the investigation team, headed by lawyer Yuichi Suzuki, a former prosecutor at the Tokyo District Public Prosecutor’s Office. In July, the new management changed its accounting auditor from ChuoAoyama Pricewaterhouse Coopers to Deloitte Touche Tohmatsu Japan.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.