TOKYO, Jun 25 (Pulse News Wire) – KDDI Corporation (9433.T) disclosed a material weakness in its financial reporting internal controls based on findings from its fiscal 2026 internal control report submitted to the Kanto Finance Bureau on June 25. The issue was identified through investigations into suspicious transactions within its advertising agency operations involving its subsidiary Biglobe and its affiliate G-Plan.
In January 2026, irregularities in some advertising transactions were confirmed, leading to the cancellation of related sales revenues and costs. The company received a special investigation committee's report on March 31, 2026, revealing fraudulent circular transactions without underlying economic substance had occurred since previous fiscal years. As a result, KDDI determined necessary adjustments to prior-year financial statements.
To address these issues, KDDI plans to strengthen risk management processes, improve segregation of duties, enhance audit functions, and reinforce overall governance structures across its subsidiaries. Specific measures include setting up risk review committees, refining procurement procedures, and increasing oversight of financial activities. Despite these efforts, the company acknowledged it could not rectify the weaknesses within the fiscal year due to time constraints.
However, KDDI remains committed to implementing comprehensive corrective actions aimed at preventing recurrence and ensuring robust internal controls moving forward.
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