Notice of Improper Accounting at an Overseas Consolidated Subsidiary and Postponement of Q1 Financial Results Announcement
TOKYO, August 8, 2012 -- OKI (TSE:6703, "Company") today announces it has discovered improper accounting at an OKI Group overseas consolidated subsidiary in Spain ("OSIB"), Oki Systems Ibérica S.A.U., and has become evident that this will impact the Company's consolidated financial results. The Company has established an External Investigative Committee comprising outside experts on August 7 to investigate the details and develop preventive measures.
The Company regrets the occurrence of this misconduct by its consolidated subsidiary and sincerely offers deepest apologies to all the shareholders including investors, business partners, customers and other relevant parties for any inconvenience caused.
The Company announces the circumstances and findings to date as well as its future plans as follows:
1. Circumstances of the Discovery and Overview of the Matter
The Company was informed of the possibility of an improper accounting at OSIB by Oki Data Corporation, its consolidated subsidiary responsible for the printer business, in July 2012. Oki Data Corporation had begun an internal investigation in Spain in which improper accounting practices became suspicious. Effective July 25, 2012, the Company established an internal investigation committee to ascertain the status through measures including assembling an investigation team and dispatching its members to Spain, etc.
Through the Company's internal investigation to date, it has been discovered that the Managing Director of OSIB (recruited locally, currently under suspension) had conducted improper accounting by excessive posting of accounts receivable. In light of the situation, the Company set up an External Investigative Committee comprising external experts on August 7, 2012 and has started to ascertain the whole truth objectively and review of measures to prevent recurrence.
Members of the External Investigative Committee
- Kazuo Ishii, Attorney (Kazuo Ishii Law Office)
- Hideo Okamura, Attorney (Kazuo Ishii Law Office)
- Takuei Maruyama, Certified Public Accountant (PricewaterhouseCoopers Co., Ltd.)
- * Each of the member does not have any interests in the OKI Group.
2. Impact on Business Results as of August 8, 2012
Based on investigations so far, the total impact of this matter on consolidated business results is estimated to be approximately 8.0 billion yen in risk of loss and there is a possibility that it may impact past fiscal year results. This amount is based on investigations to date and the Company will promptly determine details of the impact based on the findings by the External Investigative Committee and other factors.
3. Delay in Filing the First Quarterly Report of the Fiscal Year ending March 31, 2012
The Company anticipates that it will receive findings from the External Investigative Committee before confirming the appropriateness of the financial results for the Q1 of the fiscal year ending March 31, 2013, and then, receiving the quarterly review statement from its accounting auditor. Therefore, the Company is unable to announce the Q1 financial results by August 14, 2012, the filing due date required under the Financial Instruments and Exchange Act and plans to disclose financial results for the Q1 of the fiscal year ending March 31, 2013 by September 14, 2012.
4. Designation as Security under Supervision (confirmation)
The Tokyo Stock Exchange and Osaka Securities Exchange listing regulations stipulate that, upon disclosure of the fact that it is unlikely for the quarterly report to be filed by the due date pursuant of the Financial Instruments and Exchange Act, the listed stock may be designated as a "security under supervision (confirmation)". Therefore, it is expected that the shares of the Company will be designated as "security under supervision (confirmation)" as Tokyo Stock Exchange and Osaka Securities Exchange call for attention of all investors.
5. Postponement of Q1 Financial Results Announcement
The Company plans to confirm appropriateness of the financial results for the Q1 of the fiscal year ending March 31, 2013 upon receiving findings from the External Investigative Committee. Therefore, the Company has postponed the original announcement date, August 10, 2012 and expects to disclose Q1 financial results by September 14, 2012.
6. Future Plans
The External Investigative Committee, the Company will investigate to ascertain the whole truth and take necessary measures to prevent reoccurrence of such misconduct. Moreover, the Company will immediately disclose the findings by the External Investigative Committee and preventive measures. The Company intends to make necessary corrections to its past fiscal year results and promptly disclose the impact on its financial results for the fiscal year ending March 31, 2013.
The Company offers its deepest apologies to its shareholders, investors, business partners, customers and other relevant parties for any inconvenience caused. The OKI Group will work together to regain the public's trust. To our stakeholders, we ask for your continued and steadfast support as we move forward.
Overview of Oki Systems Ibérica S.A.U.
- Company name
- Oki Systems Ibérica S.A.U.
- Madrid, Spain
- Hiroshi Matsuura, Acting Managing Director (Assigned July 10, 2012)
- Lines of business
- Sales of printers and printer related office equipment
- 4,507,000 Euros
- Oki Electric Industry Co., Ltd.
Oki Data Corporation (Oki Electric Industry Co. Ltd. 100%)
Oki Europe Ltd. (Oki Data Corporation 100%)
Oki Systems Ibérica S.A.U. (Oki Europe Ltd. 100%)
About OKI Electric Industry (OKI)
Founded in 1881, OKI Electric Industry is Japan's first telecommunications manufacturer. Headquartered in Tokyo, Japan, OKI provides top-quality products, technologies, and solutions to customers through its info-telecom systems and printer operations. Its various business divisions function synergistically to bring to market exciting new products and technologies that meet a wide range of customer needs in various sectors. Visit OKI's global web site at http://www.oki.com/.
- The names of the companies and products mentioned in this document are the trademarks or registered trademarks of the respective companies and organizations.
- Press Contact:
- Public Relations Division
- * Information in the press releases is current on the date of the press announcement, but is subject to change without prior notice.