Nihon M&A Center : Announcement regarding receipt of the Research Committee Investigation Report and publication of its findings

Published February 14, 2022 at 6:31 a.m. UTC

Source: MarketScreener

	February 14, 2022
To whom it may concern
Company name:	Nihon M&A Center Holdings Inc.
Representative:	Suguru Miyake, President and Representative
	Director
( S t o c k e x c h a n g e c o d e : 2 1 2 7 , T S E F i r s t S e c t i o n )
Contact:	Takamaro Naraki,
	Senior Managing Director, General Manager,
	Administration Division

(Phone: +81-3-5220-5451)

Announcement regarding receipt of the Research Committee Investigation Report and publication of

its findings

On December 20, 2021, Nihon M&A Center Holdings Inc. (the "Company") issued a statement "Announcement of Investigation on Attribution Period of Sales at our Subsidiary" concerning the discovery of some erroneous apportionment of sales to accounting periods at its subsidiary Nihon M&A Center Inc., as a consequence of internal verification. Since then the Company has conducted an internal investigation using external experts, covering the period of five and a half years up to the present.

Furthermore, on January 31, 2022 as the report of the investigation was reaching completion, the Company decided to form a Research Committee comprising of the people who had hitherto undertaken the research. Having now received the Research Committee Investigation Report, the Company has set out below the findings and plans for how to respond in the future.

The Company again profusely apologises for the huge trouble and concern that this has caused our shareholders, the investment community and related parties. The Company shall do its utmost to implement policies which prevent any future reoccurrence and to regain everyone's confidence.

Details

Contents of Research Committee Investigation Report
Please refer to the separate document "Investigation Report" for the content of the report received from the Research Committee.
Impact on prior year results
Today on February 14, 2022, the Company is releasing a statement "Announcement regarding submission of the report on restatements and the impact of restatements on published financial accounts" concerning the announcement of the report findings and amendments being made to officially published results publications for incorrect reporting during all quarterly periods since Q1 FY2020 (April-June 2020).
Directors response
Due to the severity of the research findings, at today's Board of Directors meeting the following action was resolved.

Job title	Name		Actions
		Reduction in	Voluntary return	Others
		remuneration


President and	Suguru Miyake	50% of monthly	50% of monthly	-
Representative Director		remuneration	remuneration

Executive Vice	Takamaro Naraki	30% of monthly	20% of monthly	Downgrade from
President and Director		remuneration	remuneration	Executive Vice
				President to Senior
				Managing Director

Managing Director	Naoki Takeuchi	30% of monthly	20% of monthly	Downgrade from
		remuneration	remuneration	Managing Director
				to Director,
				Removed from Head
				of Sales Division

Managing Director	Masahiko Otsuki	10% of monthly	10% of monthly	-
		remuneration	remuneration

Chairman and	Yasuhiro	20% of monthly	10% of monthly	-
Representative Director	Wakebayashi	remuneration	remuneration

*10% voluntary return of monthly remuneration from other Directors and Outside Directors.

Treatment of individual employees responsible for the related inappropriate actions will be taken fairly in accordance with the company's internal disciplinary rules.

4. Future action points

In sincere response to the causes for the occurrence and proposed future preventative measures identified in the Investigation Report, the Company is implementing the following measures as the focal point for the effective prevention of any reoccurrence and strengthening of internal controls. Details of the implementation progress will be announced appropriately in due course.

Formation by management of ethos for the observance of compliance regulations and clarity of management aims.
Formation of a dedicated compliance department and the role of Chief Compliance Officer (CCO)
Implementation of effective compliance training and education programmes.
Reevaluation of management methods for the overall process of human resources performance reviews and quarterly results targets.
Strengthening of process for reporting and system for regular discussions with key people in the sales division.
Strengthening the audit and supervisory department functions.
Clarification of responsibility for the inappropriate reporting which took place and review of the sales organization.
Reconstruction of system for the flow of reporting sales and recording sales.
Establishment of optimal systems to manage handling of contract documents.

This English translation is for reference purposes only and not an official translation of the original Japanese texts. In the event a difference arises regarding the meaning herein, the original Japanese version shall prevail as the official authoritative version.

INVESTIGATION REPORT

February 14, 2022

Nihon M&A Center Holdings Inc.

February 14, 2022

To: Nihon M&A Center Holdings Inc.

Nihon M&A Center Holdings Inc. Investigation Committee

Investigation Committee Chair:	Yo Yamagishi, Attorney-at-Law
Investigation Committee	Yuya Inoue, Attorney-at-Law
Member:
Investigation Committee	Masahiko Kume, Certified Public Accountant
Member:
Investigation Committee	Joji Ikegawa, Certified Public Accountant
Member:
Investigation Committee	Naoki Kinoshita,
Member:	Outside Director (Audit and Supervisory
	Committee Member)
Investigation Committee	Yoshinori Yamada,
Member:	Outside Director (Audit and Supervisory
	Committee Member)

TABLE OF CONTENTS

I. Regarding Investigation by Investigation Committee .....................................................	6
1.	Purposes of Investigation ...........................................................................................	6
2.	Background Leading up to Commencement of Investigation.....................................	6
II.	Overview of Investigation.............................................................................................	10
1.	Terms of Investigations ............................................................................................	10
2.	Term Subject to Investigation ..................................................................................	10
3.	Companies Subject to Investigation .........................................................................	10
4.	Members of Investigation Committee and their Profiles ..........................................	10
5.	Individuals Who Conducted Investigation ...............................................................	12
6.	Company's Cooperation with Investigation Committee Members...........................	13
7.	Methods of Investigation..........................................................................................	13

Investigation to Identify Inappropriate Sales Report Cases (Sampling Cases to be

	Investigated and Review of Materials) ................................................................	14
(2)	Interview with Sales Employees..........................................................................	16
(3)	Interview with Management ................................................................................	17
(4)	Review of Materials Concerning Management....................................................	17
(5)	Digital Forensics Investigation ............................................................................	18

Contact Point for All Sales Employees to Report Involvement in Inappropriate Sales Reports by Executive Directors (gyōmu shikkō torishimariyaku) of Company

	(from January 25, 2022 to January 27, 2022) ......................................................	20
(7)	Supplemental Investigations................................................................................	21
(8)	Investigation on Impacts on Financial Statements...............................................	21
III. Overview of Management Organization and Business System at Company.................	23

1. Scope of Responsibilities of Executive Directors (gyōmu shikkō torishimariyaku) .23

2.	Business System at Sales Division ...........................................................................	25
3.	Company's M&A Advisory Services .......................................................................	27
4.	Administrative Works at Administration Division ...................................................	28
5.	Process for Recording Sales .....................................................................................	28
6.	Sales Database at the Company................................................................................	30
	(1) After Introduction of "Salesforce" (From 3rd Quarter of Fiscal Year 2019).......	30

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