Abalance, a company listed on the Tokyo Stock Exchange Standard, is currently under scrutiny due to financial reporting errors. On the 26th, the verification committee established by the company published a report that challenged the findings of a third-party committee, which had labeled its revenue overstatement as 'intentional fraud'. The verification committee pointed out that the third-party's conclusions were based on hearsay and lacked sufficient evidence, categorizing their determinations as 'rough certification'. However, all parties acknowledge that there are serious governance issues within Abalance that require a management overhaul.

The third-party committee had issued a report last December asserting that the mistakes in the financial statements corrected two years ago were the result of intentional wrongdoing. They criticized the audit committee for leading to erroneous conclusions and also indicated that the explanations provided during the correction were fraudulent. In response, Abalance expressed dissatisfaction with this characterization and formed a verification committee made up of external lawyers to reassess the allegations.

While the verification committee criticized the lack of clarity regarding the nature of the alleged misconduct, they did concede that the third-party committee raised valid points about the opacity of overseas subsidiaries and the undisclosed substantial loans made to a chairman from a subsidiary. They concluded that the overarching issue was not a deliberate cover-up but rather weaknesses in the accounting department's ability to perform appropriate financial processing. Abalance stated its commitment to sincerely addressing both the findings of the third-party investigation and the verification committee’s findings to implement measures that will prevent such issues from recurring.