Mikuni Discloses Material Weakness in Financial Reporting Internal Controls

TOKYO, Jun 26 (Pulse News Wire) – Mikuni Corporation (7247.T) disclosed a material weakness in its internal controls related to financial reporting based on its fiscal year ended March 2026 internal control report submitted to the Kanto Finance Bureau on June 26, 2026. The identified material weakness stems from fraudulent activities conducted by a former employee at its subsidiary Taiwan Sangoku Co., Ltd.

During the fiscal year ending December 2025. The former employee misappropriated funds from the company's bank account to personal accounts multiple times. The investigation revealed sophisticated concealment tactics employed by the individual. The root causes of the incident include inadequate checks within accounting procedures, long-term fixed roles among few personnel, and personalized handling of tasks.

As a result, the company determined there was a significant deficiency in its overall internal controls and financial reporting process. Despite efforts to address the issue, the material weakness could not be rectified prior to the end of the fiscal year due to its discovery post-submission deadline. To prevent recurrence, Mikuni has implemented corrective measures based on recommendations from its internal investigation team, which were detailed in a May 29 press release. While necessary adjustments have been reflected in the consolidated financial statements, the audit opinion remains unqualified, indicating the financial reports are free from material misstatements.