Asking Last One Mile Inc. (TSE Growth, 9252), led by President Makoto Watanabe, whose chief of strategic planning refers to himself as a "listing contractor."
The Last One Mile Labor Union demands that Last One Mile Co., Ltd. (Tokyo Stock Exchange Growth Market, Securities Code 9252) fulfill its sincere and transparent accountability regarding our company's listing process and the integrity of its ongoing disclosures after listing.
In a series of articles previously issued by our association, we have organized the points concerning stock-related suspicions, suspicions regarding relationships, and the lack of accountability in the response of our company's management, involving our Representative Director, Chairman, and CEO, Makoto Watanabe, our former Head of Corporate Planning Office and Certified Public Accountant, Satoshi Saito, and Mr. Tadayoshi Nakano.
This article, from the perspective of "discipline as a listed company" among this series of arguments, re-examines and directly addresses the most significant point that cannot be overlooked.
Namely, the fact that Mr. Satoshi Saito, a certified public accountant who has referred to himself as a "listing contractor," is suspected of violating the lock-up (restriction on disposal of shares), which is one of the most basic rules imposed by the Tokyo Stock Exchange on officers and employees of listed companies, without going through the necessary procedures, despite his position as the former General Manager of the Corporate Planning Department of our company, has been pointed out from both inside and outside the company.
Furthermore, according to information attributed to Mr. Toshihiko Nakano, the possibility that "Mr. Nakano and Mr. Saito colluded to circumvent the stock disposal restriction clause" has also emerged.
This association is not in a position to independently determine the facts in question addressed in this article. This article is intended to summarize and present matters that the company's management should explain themselves, concerning issues directly related to the discipline of a listed company and market trust.
Did a person who calls himself a "listing contractor" violate the most basic rules that even the Tokyo Stock Exchange enforces?
We have received feedback from various sources regarding Mr. Satoshi Saito, generally with the following assessments.
Mr. Satoshi Saito is a certified public accountant who has specialized in the preparation for and operations related to the listing of companies. He positions himself as a so-called "listing contractor" and asserts that he has advised and guided companies preparing for listing on the design of the listing process, capital policy, establishment of internal controls, accounting treatment, and development of disclosure systems. During the period of preparation for listing and immediately after the listing of Last One Mile Inc., he was in a position to be deeply involved in our company's capital policy, accounting, finance, dealings with external parties, and development of disclosure systems as the Head of the Corporate Planning Department.
These are the personal evaluations of Mr. Satoshi Saito that have been shared internally and externally.
However, suspicions have been raised both internally and externally that the shares and other assets in question, which Mr. Satoshi Saito held personally, and which were subject to restrictions on transfer, lock-up agreements, contractual disposition restrictions, or required approval/confirmation from the issuing company or relevant parties, may have been substantially transferred, pledged, re-registered, transferred in control, or made available to Mr. Takashi Nakano without obtaining the necessary approvals, confirmations, reports, or explanations to interested parties.
This brings us to an extremely significant structural question that our management cannot avoid.
The lock-up imposed by the Tokyo Stock Exchange on listed companies and their related parties is one of the most fundamental rules, forming the core of its listing regulations and related rules. It is a mechanism directly linked to securing stable shareholders at the time of new listing, the soundness of stock price formation, the trust of market participants, fair price discovery, and as a prerequisite for continuous disclosure after listing. It is a basic rule that any professional involved in listing preparations should be intimately familiar with.
Why is it suspected that a certified public accountant, who called himself a "listing contractor" and was in a position to advise and guide companies through the listing process, did not comply with the listing rules' restrictions on sanctions that applied to himself?
This association is not in a position to independently certify Mr. Satoshi Saito's perceptions and actions. However, from the perspective of accountability as a listed company, we must provide a sincere explanation regarding at least one of the following two possibilities:
First possibility: Mr. Satoshi Saito may have lacked sufficient understanding or awareness of the disposal restrictions, such as lock-ups, imposed on officers and employees of listed companies.
Second possibility: Mr. Satoshi Saito, fully understanding or being aware of these disposal restrictions, proceeded with the disposal or use of the subject shares, etc., without going through the necessary procedures.
Regardless of which of these possibilities is true, it is extremely serious from the perspective of discipline as a listed company.
If the first possibility is true, it means that a certified public accountant who called themselves an "listing contractor" and specialized in assisting companies with their IPO preparations did not understand the basic rules applicable to themselves. This calls into question the reliability of their professional judgment regarding all the advice and guidance they provided on other matters during the IPO preparation period.
If the second possibility is true, it means the action was taken with full knowledge of the violation of listing rules, which directly relates to the disciplinary awareness and legal compliance of officers and employees of listed companies.
In any event, our management team has a responsibility to answer the following question.
Was the Last One Mile IPO process itself okay?
From here, the argument deepens further.
The fact that Mr. Satoshi Saito was in a position to be involved in capital strategy, accounting, finance, handling of external parties, and the establishment of disclosure systems as the Head of our Corporate Planning Office during our preparations for listing and immediately after the listing means that it is highly probable that Mr. Satoshi Saito's involvement extended to our listing process itself.
And the fact that suspicions have arisen that Mr. Satoshi Saito violated the most basic disposal restriction rules for listed companies, such as lock-ups, without going through the necessary procedures, logically means that strong doubts are cast on the integrity of our company's listing process itself.
This association is not in a position to independently verify the accuracy and completeness of the securities registration statement, prospectus, corporate governance report, lock-up agreement, disclosure of related party transactions before and after listing, and other listing-related documents submitted by our company at the time of its listing. However, if Mr. Satoshi Saito, whose involvement is in question in this matter, was involved in the process of preparing and submitting these documents, our company's own sincere verification and explanation regarding their accuracy and completeness are now strongly required.
The questions for the Last Mile management team are as follows:
- 1. Regarding the alleged disposal and use of the subject shares by Mr. Satoshi Saito, when and to what extent did our management recognize this matter?
- Second, has the Company independently verified the impact of the capital policy during the IPO preparation period, the lock-up agreement, the disclosure documents, and the related party transaction disclosures on the aforementioned doubt?
- Third. To whom did our company report regarding this matter, and when and how were these reports made? If no reports were made, what are the reasons?
- Fourth, does the Company determine that this matter has no impact in relation to the disclosures in its shelf registration statements, prospectuses, corporate governance reports, annual securities reports, and internal control reports? If so, what is the specific basis for that determination?
- Fifth. Did the Company independently investigate whether Mr. Satoshi Saito utilized his position as the former General Manager of the Corporate Planning Office, his relationships with the Company's management, his credibility as an individual associated with the Company, and his knowledge of accounting and capital policies in connection with the transfer or use of the subject shares, etc.?
As a publicly traded company, these are the questions our management team must directly answer to shareholders, investors, business partners, employees, and the market in general.
And how has Makoto Watanabe, president of Last One Mile, responded to these doubts?
The point here concerns the response of our Representative Director, Chairman, and CEO, Makoto Watanabe.
As has been organized in articles previously issued by our association, information has been received from multiple sources stating that Mr. Makoto Watanabe repeatedly made statements actively defending Mr. Joki Nakano at the time when Mr. Nakano's whereabouts became unknown in Cambodia.
Furthermore, information has been received to the effect that Mr. Tsuguyoshi Nakano himself had, even prior to reports of his departure for Cambodia and subsequent disappearance, named Mr. Makoto Watanabe and Mr. Satoshi Saito to those around him as his refuge. It is also reported that he made statements to those around him to the effect that he had used the subject shares and other assets together with Mr. Makoto Watanabe and Mr. Satoshi Saito without undergoing the necessary procedures.
The union is not in a position to independently verify the truthfulness of this information. Mr. Nakano's own statements contain clear discrepancies and inconsistencies when compared to the doubts raised in local media reports and the details of the arrest reports, and the union must also carefully evaluate the overall reliability of his statements.
However, as we have repeatedly pointed out, what is important here is not the truth or falsity of these individual statements. What is important is the fact that Mr. Nakano repeatedly stated to those around him, prior to the news of his arrest, that he would designate Mr. Makoto Watanabe and Mr. Satoshi Saito as his refuge, and suggested his joint involvement with them regarding the handling of the subject shares.
Even if some or all of Mr. Yasuyoshi Nakano's statements were false, the fact remains that a relationship objectively existed between Mr. Yasuyoshi Nakano and Mr. Makoto Watanabe and Mr. Satoshi Saito, which led Mr. Yasuyoshi Nakano to make such statements.
Furthermore, as our Chairman and CEO, Mr. Makoto Watanabe is said to have repeatedly made statements actively defending Mr. Kamekichi Nakano during the period when Mr. Nakano's whereabouts were unknown in Cambodia.
Here are the questions for our management:
- 1. When and to what extent did President Watanabe become aware of the suspected disposition and utilization of the subject shares by Mr. Satoshi Saito?
- Second. When and to what extent did President Watanabe become aware of the information that Baron Yoshiki Nakano had publicly stated to those around him that he would use them as his refuge?
- Third. After becoming aware of these facts, did President Watanabe make statements defending Mr. Nakano's disappearance in Cambodia, or did he make those statements without being aware of these facts? If the former, why did he choose to defend him? If the latter, as Chairman and CEO, why did he make statements defending him without verifying the facts?
- 4. Did President Watanabe appropriately report on this series of facts to the Board of Directors, the Audit and Supervisory Committee, Outside Directors, the Internal Audit Department, the Accounting Auditor, and major shareholders? If not, what are the reasons?
These questions are directly related to the executive director's duty of care, duty of loyalty, responsibilities for internal controls and dialogue based on the Corporate Governance Code, and the minimum level of discipline expected by the market from the representative of a listed company.
Emerging composition
Here, I will present the points I've organized so far as a single framework for my readers.
Mr. Satoshi Saito, a certified public accountant who has described himself as a "listing contractor," was involved in our company's listing process in his capacity as head of our Corporate Planning Office. Following the listing, questions have been raised regarding his handling of the subject shares and other securities without undergoing the necessary procedures for disposal restrictions that apply to him, such as the lock-up.
It is alleged that Mr. Kugafumi Nakano publicly stated to those around him, even before the arrest reports, that he had used the shares in question without going through the necessary procedures together with Mr. Satoshi Saito. It is also said that he named Mr. Satoshi Saito and Mr. Makoto Watanabe to those around him as his refuge. Following reports of suspected fraud and embezzlement in local media, it has been reported that he was arrested by the Kagoshima District Public Prosecutors Office.
And Mr. Makoto Watanabe, in his capacity as our Chairman and CEO, is a person who was in a position to be aware of the series of suspicions regarding Mr. Satoshi Saito and Mr. Shigeyoshi Nakano, and is said to have repeatedly made statements in defense of Mr. Nakano during the period when Mr. Nakano was unaccounted for in Cambodia.
In the context of these three parties, our company's listing process, ongoing disclosure as a listed company, internal controls, related party management, beneficial ownership identification, and corporate governance are currently being strongly tested.
As we have repeatedly stated, this association is not in a position to make its own factual determinations regarding the individual doubts raised in this article. However, allowing so many issues to remain unaddressed within our management would lead to irreparable damage to the trust of our shareholders, business partners, customers, employees, and the market in general.
Legally problematic points
This Association is not in a position to determine matters relating to criminal liability for each issue discussed in this article in its own capacity. However, the legal issues concerning listed companies, their management, and the former head of the corporate planning department, as generally understood by society, are as follows.
- The relationship between the duty of care and the duty of loyalty of directors under the Companies Act.
- The relationship with the duty to establish an internal control system under the Companies Act.
- The relationship between the accuracy and completeness of the Securities Registration Statement, Prospectus, Annual Securities Report, Internal Control Report, and Corporate Governance Report under the Financial Instruments and Exchange Act.
- Relationship between the Tokyo Stock Exchange's Listing Regulations, Listing Examination Standards, Corporate Governance Code, and Lock-up System.
- The relationship between understanding beneficial owners, managing related parties, and the accuracy of major shareholder information.
- Relationship between the Anti-Social Forces Exclusion System and the Prevention of Transfer of Criminal Proceeds.
- The purpose of the Whistleblower Protection Act and its relationship to the effectiveness of internal reporting systems.
This union demands that we clarify the specific grounds on which we have determined that each issue discussed in this article does not affect these legal obligations and market discipline.
Last One Mile Labor Union's Stance
Our association's greatest wish is for Last One Mile Co., Ltd. to achieve sustainable development as a listed company on the Tokyo Stock Exchange Growth Market, as a socially responsible business operator, under sound corporate governance and labor relations.
This article is not intended to socially attack our company, its management, or its former head of corporate planning. What our association seeks is for our company to fulfill its sincere and transparent accountability regarding each of the points raised in this article, as a listed company and as an enterprise with social responsibility.
Regarding Mr. Satoshi Saito, Mr. Kazuoki Nakano, and Mr. Makoto Watanabe, the factual basis of each suspicion described in this article should be left to the strict and fair judgment of investigative and judicial authorities. Our union is not in a position to substitute that judgment.
However, if our management continues to remain silent on these social concerns and fails to be accountable, the very foundation of our company as a publicly traded entity will be shaken.
Specifically, the alleged violation of the lock-up agreement by Mr. Satoshi Saito, which this article addresses head-on, is an issue directly related to the integrity of our company's listing process. In relation to the disclosures in our securities registration statement, prospectus, corporate governance report, annual securities report, and internal control report, our company is urgently required to conduct a sincere review and provide explanations.
This association strongly urges our company's management to promptly provide a sincere explanation to all employees, shareholders, business partners, customers, and the market regarding each of the issues discussed in this article.
Recently, there have been a series of cases in Japanese society where scandals at listed companies have suddenly come to light, triggered by internal whistleblowing, testimony from former employees, external accusations, media reports, or investigations by supervisory authorities.
What these cases have in common is not the fraud itself, but the fact that the organization's disregard for initial information, hostility towards whistleblowers, internal cover-ups, and avoidance of accountability ultimately destroyed the organization's credibility.
This is precisely what Last One Mile is being questioned about right now. In particular, given the emerging doubts that the company's former head of corporate planning (also a certified public accountant who reportedly called himself the "undertaker of listings") violated the lock-up, a fundamental rule underpinning listed companies, how our company's management handles this will reflect the very integrity of our company as a listed entity.
This association sincerely hopes that our management will seriously examine this matter, establish an independent investigation system, and fulfill its sincere accountability to shareholders, business partners, customers, employees, and the market in general.
To all cooperative members, we ask that you calmly observe the situation regarding this matter and continue to perform your daily duties with fortitude, as you always have.