Financial Results Briefing for Fourth Quarter of Fiscal Year Ended December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
President and Chief Operating Officer
Satoshi Yamane
February 10, 2025
Introduction | 2/31 |
Statement Regarding Our Benikoji (Red Yeast Rice)-related Products
We deeply apologize again for the significant concerns and distress felt by our customers, business partners, and all those associated with us, in connection with our benikoji-related products.
We give priority above all to apologizing to and compensating
our customers who have suffered health damage and our suppliers
who have suffered losses, and we will do so sincerely and appropriately.
Background to date | 3/31 |
Time
Outline
Mid-Jan. | Contacted by customers who had taken Beni-koji Choleste-Help and their doctors. | |||
Mar. 22 | Held an extraordinary meeting of the Board of Directors, announced a request for discontinuation of use of red yeast rice products | |||
and a voluntary recall. | ||||
Apr. 25 | Started payment of the actual amount of medical expenses as a provisional measure until the cause is identified. | |||
Apr. 26 | At an extraordinary meeting, the Board of Directors resolved to establish a fact-finding committee. | |||
2024 | ||||
May | Started investigation by corporate auditors (including outside directors). | |||
July 23 | Announced to the public the findings of the fact-finding committee. Announced change in Representative Directors. | |||
Aug. 19 | Began providing compensation to customers who have suffered health problems as a result of taking the Beni-koji Choleste-Help | |||
and other products. | ||||
Sep. 17 | Released an outline of measures to prevent recurrence. | |||
Nov. 29 | Presented the FY2025 management policies under the main theme "customer-first management" to all executives and employees. | |||
Jan. 1 | Carried out a large-scale organizational restructuring and personnel changes. | |||
2025 | Jan. 21 | Announced proposed changes to the next Board of Directors members. | ||
Feb. 10 | Released detailed progress report on measures to prevent recurrence. | |||
We will continue to place the highest priority on compensation and measures to prevent recurrence, and we will disclose the progress on a regular basis. | ||||
Overview of the measures to prevent recurrence (three pillars) | 4/31 |
- Awareness Raising and Structural Enhancement regarding Quality and Safety
- Thoroughly implement "quality and safety first" to change the awareness of our executives and employees regarding quality and safety.
- Clarify roles and responsibilities and strengthen quality assurance and management systems.
- Fundamental Reform of Corporate Governance
- Revamp the composition of the Board of Directors that oversees the management of the new Kobayashi Pharmaceutical.
- To regain the trust of our stakeholders and realize a new Kobayashi Pharmaceutical, establish determination and the mechanisms to become a company that does the right thing in the right way.
- "New Kobayashi Pharmaceutical" to be re-created by all of us
- To enhance our risk sensitivity and our ability to create new value, implement measures to eliminate the homogeneity that exists within our company and ensure diversity.
- All executives and employees will work together as one to re-create a new Kobayashi Pharmaceutical.
For details on the progress of the measures to prevent recurrence, please see "Notice regarding progress of measures to prevent recurrence" released today.
Major progress of measures to prevent recurrence | 5/31 |
1. Awareness raising and structural enhancement regarding quality and safety
[Progress] • Steady progress in raising awareness for "quality and safety first" (company-wide education, two-way dialogue between management and employees, etc.)
- Completed review of quality control system to clarify roles and responsibilities of departments responsible for quality and safety and enable them to demonstrate greater expertise.
[Future] | • Strengthen cooperation between departments, rebuild quality management system, and promote refinement of quality control standards/product | ||||||
inspections, etc. | |||||||
Status | |||||||
Implementation/ | |||||||
Description and progress | Start/ | ||||||
Planning | preparation | Implemented | introduction | ||||
for | /introduced | ||||||
introduction | |||||||
Education and | Provision of education and training on quality and safety for all executives and employees | Done (2024/6~) | |||||
awareness reform | Regular transmission of messages and dialogue with employees by the president | Done (2024/8~) | |||||
Strengthening of | Clarification of the role of the Reliability Guarantee Headquarters | Done (2025/1~) | |||||
quality assurance | Shift to function-based headquarters to strengthen front-line expertise | Done (2025/1~) | |||||
system | |||||||
Self-inspection and third-party checking of each plant | Done (2024/10~) | ||||||
* Continued after this | |||||||
Reinforcement of | |||||||
Establishment of the Manufacturing Promotion Office | Done (2025/1~) | ||||||
manufacturing | |||||||
Establishment of comprehensive hygiene management standards for each product category | 2025/7~ | ||||||
management system | |||||||
* Star with oral products | |||||||
Effective periodic holding of "mass production review meetings" | 2025/4~ | ||||||
Inspection techniques | Consideration and introduction of procedures for detecting contamination by ingredients other than | 2025/8~ | |||||
specified ingredients | |||||||
Personnel evaluation | Introduction of a system in which activities that contribute to quality and safety are subject to evaluation | 2025/12 |
Major progress of measures to prevent recurrence | 6/31 |
2. Fundamental reform of corporate governance
[Progress] • Examined the ideal composition of the Board of Directors for the new structure, and selected and invited personnel from both inside and outside the company.
- Promoted a review and reconfiguration of the executive meeting structure with the aim of enhancing expertise and improving the quality and speed of decision- making.
- From the perspective of strengthening the crisis management system, strengthened emergency response organizations and the risk information escalation system.
[Future] | • Strengthen cooperation with corporate auditors under the new Board of Directors and enhance oversight of internal control and quality management. | |||||||
Status | ||||||||
Implementation/ | ||||||||
Description and progress | Start/ | |||||||
Planning | preparation | Implemented | introduction | |||||
for | /introduced | |||||||
introduction | ||||||||
Departure from management | ||||||||
dependent on the founding | Change of Chairman of the Board and President | Done (2024/7) | ||||||
family | ||||||||
Strengthening supervisory functions by increasing the number of outside directors and inviting a | 2025/3 | |||||||
chairman of the Board from outside | ||||||||
Board of Directors reform | ||||||||
Reexamination of organizational design | 2026/3 | |||||||
Strengthening cooperation between the Board of Directors and the executive side. | Done (2024/7~) | |||||||
Review of executive meeting | Establishment of a new Executive Committee (clarification of the executive decision-making organ) | Done (2024/11) | ||||||
structure | Establishment of four specialized committees (investment/human resources/quality/risk) | 2025/3 | ||||||
(Abolition of GOM) | ||||||||
Reinforcement of risk response | Reorganization of existing risk and compliance-related committees | 2025/3 | ||||||
structure | Building a risk escalation system in case of emergency | Done (2024/8~) | ||||||
Review of business operations | Selection based on resources | 2025/8~ |
Major progress of measures to prevent recurrence | 7/31 |
3. "New Kobayashi Pharmaceutical" to be re-created by all of us
[Progress] • Started personnel system reform for recruitment, placement, and development of human resources with an emphasis on expertise and diversity.
- Launched a project aimed at establishing the ideal state of our company in the future and building an organizational culture capable of realizing it.
[Future] | • Create a new Kobayashi Pharmaceutical based on reform of the organizational culture to place the highest priority on efforts to keep this incident from | ||||||
being forgotten. | |||||||
Status | |||||||
Description and progress | Implementation/ | ||||||
Start/ | |||||||
Implemented/ | introduction | ||||||
Planning | preparation for | ||||||
introduced | |||||||
introduction | |||||||
Recruitment, placement, and development of human resources with an emphasis on expertise and diversity | 2026/1 | ||||||
Review of organizational culture (organizational culture reform PJ) | 2025/11 | ||||||
Developing an initiative to keep this incident from being forgotten | 2025/3~ | ||||||
(Establishment of "Quality and Safety Day" on March 22 (the day this case was made public)) | |||||||
Progress of Compensation for Health Damage (as of February 4, 2025)
- Status of verification of compensation application documents
8/31
Application | |
Inquiries | |
documents | |
Approx. 1,200 people | sent |
[From April 25]
Provisional payment of the actual amount of medical expenses
Approx. 700 people
[From August 19]
Main compensation
(Medical expenses, damages
for mental suffering, etc.)
Applications accepted
Approx. 770 people
Verification
Verified
Approx. 570 people
Under verification
Approx. 200 people
Approx. 500 people
Proposed composition of the next Board of Directors | 9/31 |
In proposing a new composition of the Board of Directors at the annual general meeting of shareholders scheduled for March 2025, the main points considered are as follows:
- A majority of the board members shall be outside directors to ensure effectiveness of supervision by the Board of Directors.
- Outside directors shall be replaced in consideration of the balance between ensuring continuity of deliberations at and introducing new perspectives to the Board of Directors' meetings.
- Strengthening of internal control and quality management systems
- Securing personnel with experience and knowledge in the medical and pharmaceutical fields
- Inviting from outside a professional manager with a proven track record in corporate culture reform as Chairman of the Board of Directors
- The founding family and former president will take responsibility as a director for handling compensation, which is the most important issue.
Proposed composition of the next Board of Directors | 10/31 |
Current composition of the
Board of Directors
Position | Name |
President and Chief | Satoshi Yamane |
Operating Officer | |
Director | Akihiro Kobayashi |
Outside Director | Kunio Ito |
Outside Director | Kaori Sasaki |
Outside Director | Chiaki Ariizumi |
Outside Director | Yoshiro Katae |
Candidates for directors to be proposed at the next
annual general meeting of shareholders
Position | Name | |
New | ||
Chairman of the Board | Yoshihito Ota | |
President and Chief | Norikazu Toyoda | New |
Operating Officer | ||
Director | Yuji Matsushima | New |
Director | Akihiro Kobayashi | Reappointed |
Outside Director | Yoshiro Katae | Reappointed |
Outside Director | Akio Takahashi | New |
Outside Director | Masato Mouri | New |
Outside Director | Shinsuke Matsumoto | New |
Outside Director | Misa Kusumoto | New |
Outside Director | Toshiaki Kadokawa | New |