Daio Paper announces its delayed reporting of fiscal H1 earnings will be on Dec. 14, plans to improve its governance by appointing outsiders to board of directors, will also review internal reporting system
December 6, 2011
– Daio Paper Corp. announced on Monday that it will release its delayed fiscal first-half earnings report on Dec. 14, the deadline given for the company to avoid being delisted from the Tokyo Stock Exchange (TSE), reported The Mainichi Daily News on Dec. 6.
The company had missed the Nov. 14 date to report its April through September earnings, which caused the TSE to put the Tokyo-based toilet and tissue paper manufacturer “under supervision.”
At the time, the company attributed the delay to its recent discovery that former Chairman Mototaka Ikawa had borrowed 10.68 billion yen (US$137.4 million) for his personal use from some of Daio Paper’s group companies, The Mainichi Daily News reported.
Also to be released on Dec. 14 is the company’s plan to keep such a scandal from reoccurring, by changing the way it is governed and make it more transparent, The Nikkei Weekly reported on Dec. 6.
In its plan, Daio Paper would appoint outsiders to its board of directors. The appointments, which would include independent experts, would occur at the company’s stockholders meeting next June. Currently, the board consists entirely of insiders.
Daio Paper will also evaluate its internal reporting system, which is now inept at catching wrongdoing by top management because the president’s office is the final destination for reports. One proposal is to have an outside attorney also receive the reports.
The group’s governance could also change, with the parent entity taking a larger stake in its subsidiaries, which are now controlled by Daio Paper’s founding family, reported The Nikkei Weekly.
Mototaka Ikawa is the son of Takao Ikawa, who is a former chairman of Daio Paper and the son of the company’s founder Isekichi Ikawa, according to an Oct. 28 report in The New York Times that was carried on IndustryIntel.com the same day.
The primary sources of this article are The Mainichi Daily News and The Nikkei Weekly, both in Tokyo, Japan, both on Dec. 6, 2011.