A former executive in charge of accounting at loss-making panel-maker Japan Display Inc. embezzled some ¥578 million ($5.3 million) over a four-year period from 2014, and was dismissed last December, the company said Thursday.
The Apple Inc. supplier filed a criminal complaint against the former executive with the Metropolitan Police Department in August this year after the alleged embezzlement came to light after a tip from an employee in October last year. The former executive said he’d used the money for gambling, the firm said.
Between July 2014 and October 2018, the former executive transferred company funds to an account at another company as expenses for fictitious deals and exchanged revenue stamps, which were purportedly obtained for contract papers, for cash, Japan Display said.
The panel maker said it had previously refrained from making the incident public in line with a request by the police, who said disclosing the matter could disrupt investigations into possible accomplices.
“We have implemented steps to prevent a recurrence and will make efforts to thoroughly comply with laws and strengthen governance,” the company said in a statement.
The incident comes as a further blow to the embattled company, which has been affected by severe competition from Chinese and South Korean rivals and declining demand from Apple.
Japan Display reported a group net loss of ¥108.67 billion in the six months through Sept. 30, up more than tenfold from ¥9.52 billion a year earlier, due to massive restructuring costs that saw its negative net worth surpass ¥100 billion.
The company was established in 2012 through the merger of the display operations of Sony Corp., Hitachi Ltd. and Toshiba Corp. and with help from state-backed fund INCJ Ltd., its biggest shareholder. Japan Display went public in 2014.
The manufacturer hopes to repair its finances through capital injections from Apple as well as from Hong Kong’s Oasis Management Co. by the end of November, after a bailout plan from a Chinese-Taiwanese consortium stalled.