Recently, there was a regrettable case where a company listed on the JPX market had implemented improper accounting practices aimed at overstating apparent profits from short-term interests. The case has undermined the confidence of investors.
The revelation of the improprieties comes at a time when Japan has just introduced its Corporate Governance Code in an effort to achieve sustainable growth and enhance corporate value in the medium-to-long term. As the market operator, we recognize the situation as a matter of grave concern that warrants serious and immediate attention.
To address the issue of the violation of the listing rules due to ineffective corporate governance, we will designate such a company as securities on alert, our existing regulatory framework which is generally considered comparable to a delisting. The designation will be imposed to demand errant companies to commit to rectifying the issues in their internal management system and other frameworks within a short time frame. Through these measures, we will endeavor to rebuild and secure public confidence in our market.
Besides, we will jointly establish a council of experts with the Financial Services Agency to deliberate on ways to enhance the efficacy of corporate governance in Japan.
We ask for your continued support and understanding in operating fair and transparent markets.
Akira Kiyota
Director & Representative Executive Officer, Group CEO
Japan Exchange Group, Inc.
