Adastria subsidiary employee embezzled 170m yen; management penalized

Adastria's consolidated subsidiary, ZETTON, announced that a former employee in its financial accounting department embezzled approximately 170 million yen between 2020 and 2025. The misconduct involved withdrawing cash from ZETTON's bank accounts for personal use and concealing it through fraudulent accounting. The discovery was made in late July following an internal tip-off, prompting an immediate internal investigation. The former employee admitted to the embezzlement and was dismissed. Adastria is pursuing recovery of damages and legal action. No other employees are implicated.

Despite the significant sum, the company stated that the embezzlement did not materially impact financial statements in prior years. The impact on current consolidated earnings is expected to be limited, with no changes to previously announced earnings forecasts.

In response, Adastria and ZETTON implemented measures to prevent recurrence, including separating accounting responsibilities and reinforcing internal controls. Adastria’s president and representative director, Osamu Kimura, along with other directors, will receive a 10% reduction in monthly compensation for three months. ZETTON's chairman and representative director, Shinsuke Suzuki, has resigned and been demoted to director, while other ZETTON directors will also face compensation reductions.