[Last One Mile Labor Union] Makoto Watanabe / Unauthorized Construction by HOTEL STUDIO

Invoice splitting, collusion, SHI fraudulent bankruptcy followed by company recycling

Does splitting the invoice into amounts under 5 million yen turn a single construction project exceeding 5 million yen into a small project that does not require a construction business license?

Regarding HOTEL STUDIO Inc., a consolidated subsidiary of Last One Mile Inc. led by Representative Director Makoto Watanabe, facts that a listed company group simply cannot overlook have become a major issue both inside and outside the company.

According to the records available to our association, HOTEL STUDIO Co., Ltd. accepted construction contracts exceeding 5 million yen per project without a construction business license, and split the invoices so that each individual invoice remained under 5 million yen.

Moreover, even after becoming a wholly owned subsidiary of Last One Mile Inc. on March 1, 2024, this method of receiving orders was continued despite the illegality being repeatedly pointed out by multiple directors, including outside directors who were Audit and Supervisory Committee members.

Furthermore, multiple executives instructed employees to retroactively rewrite invoices and align the explanations of those involved, in preparation for the possibility that the issue would escalate into an external investigation.

This is not a story about a field worker making a mistake on a single invoice.

This is an issue that calls into question the corporate culture of the entire Last One Mile Group, involving the Representative Director, subsidiary directors, parent company executive officers, the Board of Directors, the Audit and Supervisory Committee, the finance and accounting department, and the accounting auditor.

What happened at HOTEL STUDIO Co., Ltd. after it became a wholly owned subsidiary in March 2024

HOTEL STUDIO Co., Ltd. was established in December 2023 and became a wholly owned subsidiary of Last Mile Co., Ltd. through a share exchange on March 1, 2024.

Document released by Last One Mile Co., Ltd. on March 1, 2024It is explained that from the same day, Makoto Watanabe will also serve as Representative Director of HOTEL STUDIO Inc., operating under a dual-representative system consisting of Yutaro Osanai and Makoto Watanabe.

CurrentHOTEL STUDIO Inc. Official WebsiteIn that case, only Mr. Watanabe’s name is listed as the representative director, and the business activities are described as “operation of lodging facilities, and contracting for design and construction management.”

The issues at that subsidiary, which are said to have persisted from its establishment until after it was made a wholly owned subsidiary, are as follows:

• The company had been accepting construction contracts exceeding the 5 million yen threshold without holding a construction business license.
• For a single construction project, the total amount billed was split across multiple invoices so that each invoice would be less than 5 million yen.
• After making it a wholly-owned subsidiary, multiple directors, including outside directors who were Audit and Supervisory Committee members, repeatedly pointed out that it was a violation of the Construction Business Act.
• Even after the issue was pointed out, the company continued to accept orders based on explanations to the effect that “using this method, we can increase sales safely without being detected.”
• Executive officers appointed by the parent company to serve as directors of HOTEL STUDIO Co., Ltd. actively promoted the controversial contract.
• An internal directive was issued to retroactively alter invoices and other records.
• During the external investigation, those involved were instructed to coordinate their statements in order to conceal the alteration of invoices.

I didn't start doing this without knowing it was illegal.

Even after a director pointed out that the practice was illegal, the company continued it and even attempted to alter past invoices and the statements of those involved. This is what makes this case so egregious.

Even if you split the invoice so that it’s less than 5 million yen, each construction project counts as a single project.

The structure of the Construction Industry Act is not a game of counting invoices.

Article 3, Paragraph 1 of the Construction Business Act: Any person intending to engage in the construction business shall, in accordance with the classifications listed below,in accordance with the provisions of this chapter: if the person intends to conduct business by establishing business offices within the jurisdictions of two or more prefectures, the person must obtain a permit from the Minister of Land, Infrastructure, Transport and Tourism; if the person intends to conduct business by establishing a business office solely within the jurisdiction of a single prefecture, the person must obtain a permit from the governor of the prefecture having jurisdiction over the location of that business office.However, this shall not apply to any person whose business consists solely of undertaking minor construction work as defined by Cabinet Order.

For construction projects other than general building construction, contractors may undertake work without a construction business license only if the contract amount for a single project is less than 5 million yen.

Article 1-2, Paragraph 1 of the Order for Enforcement of the Construction Industry Act: Minor construction work as defined by Cabinet Order pursuant to the proviso to Article 3, Paragraph 1 of the Act refers to construction work where the contract price per project is less than 5 million yen(or 15 million yen if the construction work constitutes a comprehensive building project) or, in the case of a comprehensive building project, work involving the construction of a wooden residential house with a total floor area of less than 150 square meters.

Paragraph 2 of the same Article: When a person engaging in the same construction business undertakes the completion of construction work by dividing it into two or more contracts, the amount of the contract price in the preceding paragraph shall be the total sum of the contract prices of the respective contracts. However, this shall not apply when the contracts have been divided based on justifiable grounds.

The law states from the outset that even if a contract is divided into two or more parts, it is evaluated based on the total amount.

What is alleged to have occurred in this case is not a series of multiple, independent construction projects with different locations, purposes, scope of work, and schedules. Rather, it is the practice of breaking down a single construction project into smaller portions—each under 5 million yen—solely for the purpose of invoicing.

Since the contracts are combined for calculation purposes anyway, the argument that simply splitting the invoices will allow you to avoid meeting the approval criteria is even less valid.

Even if you create two invoices for 4.9 million yen each, it does not mean the 9.8 million yen construction work splits into two separate 4.9 million yen construction projects.

It is the same as dividing a hotel room into two without making it two separate buildings.

Article 47, Paragraph 1 of the Construction Business Act: When falling under any of the following items, the person who committed the violation shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen.

(1) When a person engages in the construction business without obtaining a license, in violation of the provisions of Article 3, paragraph (1).

If a corporation engages in unauthorized business operations, Article 53 of the Construction Industry Act not only penalizes the perpetrator but also imposes a fine of up to 100 million yen on the corporation for violating Article 47.

This is not a rounding adjustment on an invoice.

This is a criminal and administrative issue in which the representative, instructor, contracting officer, biller, approver, and parent company supervisor are each held accountable for what they recognized and what actions they took.

Did you continue the practice even after being told it was illegal, and did you retroactively alter the invoices?

The core of this matter is not about simply forgetting to obtain a construction business license.

At a board of directors meeting held after the company became a wholly owned subsidiary, several directors—including outside directors who serve on the Audit and Supervisory Committee—repeatedly pointed out that the company was in violation of the Construction Industry Act.

However, the response that was presented did not involve suspending orders, consulting with the licensing authority, and explaining the situation to customers.

The argument was essentially that “using this method, we can safely increase sales without being discovered.”

Even after realizing that the actions violated the law, the company continued with them based on the probability of detection. This represents the implementation of the management philosophy that Mr. Watanabe had repeatedly emphasized in internal training sessions—that decisions should be based “not on whether something is illegal, but on the probability of detection and the potential profit”—in the process of securing construction contracts for HOTEL STUDIO Co., Ltd.

Furthermore, centered around executive officers who assumed director positions at the subsidiary from the parent company, the problematic invoices were subsequently rewritten, and a cover-up proceeded to make past processing appear lawful.

By checking the invoice creation date, update date and time, file history, date and time of entry into the accounting system, approval date and time, and payment records, it becomes clear when, by whom, and which figures were changed.

Entering a new date on the invoice will not roll back the records on the server and in the accounting system to the past.

The Frustration and Fear of HOTEL STUDIO Employees Asked to Cover Up

Regarding the employees of HOTEL STUDIO Co., Ltd., information has been received that goes beyond mere dissatisfaction with performance targets.

After receiving multiple points of criticism from the statutory auditor regarding past illegal transactions, when an external investigation was conducted, multiple executives instructed employees to coordinate their stories in order to hide the alteration of invoices and other documents.

What was asked of the employees was not to explain what actually happened.

It was to give the same convenient explanation to the management.

Furthermore, prior to the conversion into a wholly owned subsidiary, Makoto Watanabe explained to executives on the HOTEL STUDIO side that they could make a profit after the acquisition.

However, once the acquisition was completed, unreasonable budgets, disadvantageous contracts, and sales targets built on the assumption of legal violations were forced upon them, leading to an outburst of complaints from those involved, such as "This isn't what we agreed upon" and "It's simply not worth it."

Furthermore, some subsidiary directors even made statements to the employees to the effect that they would eventually leave Last One Mile Co., Ltd., and once they finished selling their shares, they would have nothing more to do with the company.

Meanwhile, the employees remaining at the workplace had the following concerns:

• Could the invoice I created following management's instructions be treated as complicity in a violation of the Construction Business Act?
• If I refuse to rewrite the invoice or coordinate our stories, won't I face disadvantages in my performance evaluation, job assignment, or employment status?
• When questioned by an audit firm, the Ministry of Land, Infrastructure, Transport and Tourism, prefectural governments, the police, or prosecutors, won't I be asked to provide the same explanation as the management team?
• After Mr. Watanabe and close executives sold their shares and left the company, won't only the employees who followed orders be held responsible?
• Will I be forced to execute illegal or inappropriate transactions in the future in order to achieve impossible sales targets?

Even without direct verbal abuse, if a representative director or subsidiary director instructs employees to get their stories straight while holding power over their employment and evaluations, it is effectively coercion for the employees.

Even with gentle words like "I want you to explain it the same way," in an organization where only those who refuse disappear from the company, the true meaning is communicated loud and clear.

Address, personnel, assets, and hotel business reused after SHI fake bankruptcy

To understand HOTEL STUDIO Inc., looking solely at its establishment registration in December 2023 is not enough.

The company was not born by suddenly receiving hotel business knowledge, human resources, operating properties, and business partners out of thin air.

Before that, SHI Corporation existed.

Article reporting the decision to commence bankruptcy proceedings for SHI Co., Ltd.According to the report, the company was headquartered at 1-15-28 Hakataeki-minami, Hakata-ku, Fukuoka City, and on August 17, 2021, it received an order to commence bankruptcy proceedings from the Fukuoka District Court. Total liabilities amount to approximately 1.7 billion yen.

*For "1-15-28 Hakataekiminami, Hakata-ku, Fukuoka City", please refer to the article below.

According to the facts known to our association, Makoto Watanabe was deeply involved in the management of SHI Co., Ltd. as a major shareholder, advisor, and the de facto founder.

And around the time of the bankruptcy, while leaving payments to construction contractors and other business partners unpaid, profitable assets were transferred cheaply to Mr. Watanabe's company, and the hotel business's personnel, operational know-how, properties, and business relationships were transferred to a separate corporation.

This is why our union is pursuing the bankruptcy of SHI Corporation not merely as a COVID-19-related bankruptcy, but as a fraudulent bankruptcy.

Following SHI Co., Ltd., Leading Property Management Co., Ltd. and ThreeLike Co., Ltd. took over the same hotel business and human network.

And before the acquisition, HOTEL STUDIO Co., Ltd. was 66.5% owned by Nobukazu Miyoshi, Representative Director of ThreeLike Co., Ltd., and 28.5% owned by Yuichi Imayoshi, Representative Director of Smile Co., Ltd., which is an asset management company of Mr. Watanabe.

The location used as the Fukuoka sales base for HOTEL STUDIO Co., Ltd. was also 1-15-28 Hakataekiminami, Hakata-ku, Fukuoka City, which has been used by SHI Co., Ltd., ThreeLike Co., Ltd., Smile Co., Ltd., and other related corporations.

To summarize this flow, it is as follows:

• SHI Co., Ltd. is going bankrupt with approximately 1.7 billion yen in liabilities.
• The hotel business's personnel, properties, addresses, operational know-how, and business relationships will be transferred to a separate corporate entity.
• Leading Property Management Co., Ltd. and ThreeLike Co., Ltd. will continue the hotel business of the same lineage.
• HOTEL STUDIO Inc. is established through the same human and capital networks.
• Last Mile Inc. will make HOTEL STUDIO Inc. a wholly owned subsidiary through a share exchange using its own shares as consideration.
• Makoto Watanabe assumes the position of Representative Director, returning to the center of the hotel business.
• After making it a wholly-owned subsidiary, unauthorized construction, splitting invoices, double billing, retroactive tampering, and collusion become issues.

Leaving behind the liabilities and creditors in the bankrupt company, only the useful people, assets, address, and know-how are transferred to a new company.

And then acquire the new company with the stock of the listed company, and build up sales again.

Wasn't what Mr. Watanabe did not a revitalization of the hotel business, but rather a corporate recycling scheme that left only the liabilities behind with the old company?

Double counting between affiliated companies and the remark about "being able to control the top of the audit corporation"

At HOTEL STUDIO Inc., apart from the Construction Business Act issues, the company also repeatedly engaged in double-accounting—inflating sales by having closely related companies, a practice carried over from SHI Inc., trade transactions with each other to artificially boost revenue.

HOTEL STUDIO Inc., ThreeLike Inc., Leading Property Management Inc., and other affiliated companies share overlapping representatives, locations, businesses, personnel, and relationships with Mr. Watanabe.

Because those virtually related companies were double-counting the same sales or the same transactions, they were pointed out by their accounting auditor for fraudulent accounting and were advised that they should make a public announcement and apologize to society.

However, even after that, Last One Mile Co., Ltd. did not specifically disclose this issue regarding HOTEL STUDIO Co., Ltd.

According to the records available to our association, Mr. Watanabe repeatedly told senior management that no matter what the accounting auditors pointed out, there was no problem because his financial interests were aligned with the top leadership of the audit firm, allowing him to control them at will.

If auditing firms that audit listed companies are suppressed by the board of directors, the audit certification is not for investors.

It is a service that puts an accountant's seal on the numbers the management desires.

Last Mile Inc. self-disclosed that its internal controls over financial reporting as of the end of the fiscal year ended August 2024 were not effective and that there was a material weakness that needed to be disclosed.

Published material regarding the resolution of material weaknesses dated November 28, 2025Then, it explains that the causes were numerous revisions including unrecorded expenses, incorrect offsetting of deferred tax assets and liabilities, and notes on related-party transactions, as well as an insufficient checking system in the financial and accounting department.

The company announced that it resolved the material weakness at the end of the fiscal year ending August 2025.

Now, did that scope of remediation include the unauthorized construction, invoice splitting, retroactive alteration, and double-counting between related companies by HOTEL STUDIO Co., Ltd.?

If included, please disclose the findings, the amount of the correction, the persons involved, and the disciplinary actions.

If it is not included, it would mean that HOTEL STUDIO Co., Ltd. was the only entity left out of the premise of the announcement that "critical deficiencies have been resolved."

Makoto Watanabe's individual problem aside, the corporate culture of Last One Mile Co., Ltd.

Looking only at the issue of HOTEL STUDIO Co., Ltd., it might look like the arbitrary decision of Makoto Watanabe.

However, even when illegality is pointed out, the pattern of continuing based on the probability of detection, preparing paperwork and explanations afterward once the issue surfaces, eliminating the person who pointed it out, and leaving the responsibility to the employees who followed instructions has been repeated at Last One Mile Co., Ltd.

• A reactive internal control approach where, even if an employee misuses a company card for personal expenses, they are simply punished after discovery through dismissal or salary reduction.
• A culture that, upon receiving a whistleblower report pointing out ties to antisocial forces, searches for the whistleblower rather than addressing the content, and subjects them to disadvantageous reassignment.
• A culture of attempting to align statements from involved parties in a direction favorable to management when facing a criminal complaint or tax audit.
• A double standard where the private expense usage by close aides is overlooked, while the employee who pointed out the issue is disciplined.
• A culture of using corporate funds, personnel, facilities, and business partners for the representative director's personal business, related entities, romantic partners, investments, and disputes.
• A corporate culture where the Board of Directors, the Audit and Supervisory Committee, and the Internal Audit Department avoid answering specific questions and stall for time through silence.

Article 355 of the Companies Act: Directors shall comply with laws and regulations, the articles of incorporation, and resolutions of shareholders meetings, and shall faithfully perform their duties for the stock company.

The person a director is obligated to protect is neither Mr. Watanabe as an individual nor the shares he plans to sell.

The corporation Last One Mile, Inc., as well as its employees, shareholders, business partners, and customers.

If multiple directors—including members of the Audit and Supervisory Committee—pointed out the illegality but the Board of Directors as a whole failed to suspend new orders, conduct an independent investigation, preserve documents, or report the matter to the authorities, then this issue is not limited to Mr. Watanabe alone.

This is not a company that is unable to stop illegal activities, but rather a company that has used its board of directors to continue those illegal activities.

There is no way the prosecutors investigating defendant Nakano Shukki and Mr. Satoshi Saito could have overlooked HOTEL STUDIO.

The Prosecutors' Union, part of a separate media outlet called "Okami no Union," releasedMamizuka Memo articleNow, the title of the document states "Overall Diagram of Fraud by Last One Mile Group Co., Ltd."

In the document, Last One Mile Co., Ltd., Makoto Watanabe, several affiliated companies, outsourcing expenses, loans, illicit funds, advertising expenses, investments, tax effects, and other items are connected by a complex network of arrows.

Furthermore, the report includes the real name of Satoshi Saito, a certified public accountant and former head of the Corporate Planning Office, as well as references to “fraud” and “false statements,” and mentions of “indictment, prosecution, and arrest” by the Kagoshima District Public Prosecutors Office and the Fukuoka High Public Prosecutors Office.

This article does not suggest that defendant Nakano Shukki or Mr. Saito personally approved the construction contracts awarded to HOTEL STUDIO Co., Ltd. mentioned in this article.

The key point is that if the Public Prosecutor’s Office and the National Tax Agency pursue Company N and Mr. Saito for accounting irregularities while failing to investigate issues at Last One Mile Co., Ltd.—a consolidated subsidiary—where there is evidence such as board of directors’ findings, invoices, contracts, accounting data, and audit records, their investigative standards will be completely unbalanced.

Even the prosecution—which takes years to explain the illegality of the “Angel Tax System”—is capable of comparing the total cost of a single construction project, the construction business license, and the split invoices.

If you are going to seize the records of Defendant Nakano and Mr. Saito, please apply the same standards when reviewing the contracts, invoices, file revision histories, minutes of board meetings, and audit reports of HOTEL STUDIO, Inc.

If the prosecution is issuing arrest warrants for 40 people simply to obtain confessions—while avoiding cases that can be proven with objective evidence—then what they are looking for is not a crime.

He's the kind of person who easily fits into the storylines we create.

Records That Last One Mile and HOTEL STUDIO Workers Should Maintain

In this case, there is a risk that an employee who simply followed the instructions of a representative or director could be held liable as the person who ultimately created the invoice.

It is important to organize the details—who gave what instructions and when, and how the original records were altered—while the details are still fresh in your mind.

• Quotes, purchase orders, acceptance forms, contracts, design documents, scope of work, site names, client names, and project schedules for each construction project.
• All invoices, invoice amounts, issue dates, payment dates, and accounting journal entries issued for a single construction project.
• Emails, internal chat messages, meeting records, and records of verbal instructions directing to split the invoices to an amount under 5 million yen.
• The creation date and time, update date and time, revision history, and previous versions of invoices, quotes, and contracts.
• Records confirming whether a construction business license has been issued, the license number, the licensed business categories, and the validity period.
• Issues raised by members of the Audit and Supervisory Committee, outside directors, the internal audit department, the legal department, the finance and accounting department, and the external auditors.
• Minutes of the board of directors meeting, approval forms, approval records, and a list of participants regarding the decision to continue accepting orders after the alleged illegality was pointed out.
• Date and time, statements, and person who gave the instructions when asked to align explanations during an external investigation or authority response.
• Contracts, invoices, sales, outsourcing expenses, and cash inflows and outflows among HOTEL STUDIO Co., Ltd., ThreeLike Co., Ltd., Leading Property Management Co., Ltd., Smile Co., Ltd., and other affiliated companies.
• The general ledger, subsidiary ledgers, and consolidated elimination documents that allow verification that the same transaction or the same revenue has not been recorded by more than one corporation.
• Any adverse treatment—such as a transfer, demotion, change in evaluation, reprimand, demand to resign, or other form of disadvantageous treatment—received after pointing out a problem.

You do not need to coordinate your explanation with other employees.

Record independently what you actually saw, what you heard, what you created, and what you were instructed to do.

When management's explanations do not match multiple independent employee records, fabricated cover stories created after the fact are exposed by the electronic data history.

Open Questions to Mr. Makoto Watanabe, Mr. Yutaro Osanai, and HOTEL STUDIO Inc.

1. Has HOTEL STUDIO Co., Ltd., from its establishment to the present, ever obtained a construction industry license from the Minister of Land, Infrastructure, Transport and Tourism or a prefectural governor?
2. If you hold such a license, please specify the license number, licensed business categories, date of issuance, validity period, and the business location for which the license was granted.
3. Please disclose all construction work valued at 5 million yen or more per project that was contracted before obtaining the license.
4. Do you admit to the fact that you issued multiple invoices of less than 5 million yen for a single construction project?
5. If you claim that each invoice represents a separate construction project, please demonstrate that the construction location, work details, construction period, contract purpose, order date, and completion date are all independent of one another.
6. Who was the person who first proposed splitting the invoice, approved it, and instructed the employees?
7. Have you received any indication from an Audit and Supervisory Committee Member or an Outside Director that this constitutes a violation of the Construction Business Act?
8. Please clarify the date of the reprimand, the board of directors, the attendees, the agenda, the statements made, and the details of the resolution.
9. Who decided to continue accepting orders even after being pointed out for illegality?
10. Who made the statement to the effect that "with this method, we can increase sales safely without getting caught"?
11. Have you retroactively modified invoices, estimates, contracts, or other records after their creation?
12. When making changes, please clearly indicate the target of the change, the date of the change, the contents before and after the change, the person who gave the instruction, and the person who performed the work.
13. Did you instruct employees to give the same explanation when responding to an external investigation or audit?
14. Did you subject the employee who refused that instruction to unfavorable personnel action, evaluation, or a demand for resignation?
15. As Representative Director, when did Mr. Yutaro Osanai become aware of this matter, and what stoppages, investigations, and reports did he carry out?
16. Please clarify why Mr. Osanai’s name is not listed as Representative Director on the current official website, as well as the timing and reason for his resignation.
17. Clarify the personnel, capital, and business relationships between SHI Co., Ltd., ThreeLike Co., Ltd., Leading Property Management Co., Ltd., Smile Co., Ltd., and HOTEL STUDIO Co., Ltd.
18. Please clarify the personnel, properties, customers, systems, contracts, brands, operational know-how, and assets transferred from SHI Co., Ltd. to HOTEL STUDIO Co., Ltd.
19. Will you investigate the correspondence between the unpaid debts of SHI Corporation and the assets transferred to affiliated companies?
20. If this matter results in damages to the company or its customers, will Mr. Watanabe, Mr. Osanai, and other involved executives compensate the company?

Open Questions to the Board of Directors and Audit & Supervisory Committee of Last1Mile Co., Ltd.

1. When did the Board of Directors and the Audit and Supervisory Committee become aware of the unauthorized construction work and the splitting of invoices by HOTEL STUDIO, Inc.?
2. Please disclose the names of the directors and audit and supervisory committee members who pointed out the illegality, as well as the date of the meeting, the minutes, and the materials submitted.
3. Please explain why orders continued to be accepted even after the alleged illegality was pointed out, and identify the directors who approved or tacitly condoned this continuation.
4. How were the two directors seconded from the parent company to HOTEL STUDIO Co., Ltd. involved in the award of this contract, the splitting of the invoice, and the alteration of the records?
5. Have the Internal Audit, Legal, Finance and Accounting, and Audit and Supervisory Committees investigated the retroactive alteration of invoices?
6. Did you identify the person who instructed relevant parties to coordinate their stories, and did you investigate and discipline that person?
7. Have you re-verified all transactions regarding the related-party transactions and double-counting of HOTEL STUDIO Co., Ltd.?
8. Did you include this matter in the significant internal control deficiencies disclosed for the fiscal year ending August 2024?
9. If it was not included, please specify the reason and the person who made the decision.
10. Was the determination that the material deficiencies had been resolved as of the end of August 2025 made after the investigation into this matter was completed?
11. During the pre-acquisition due diligence for HOTEL STUDIO Co., Ltd., did you verify the company’s construction business license, past construction projects, its relationship with SHI, and transactions between affiliated companies?
12. If issues that could have been identified prior to the acquisition were overlooked, how would you assess the responsibility of the executives, experts, and decision-makers in charge of the M&A due diligence?
13. Have you reported this matter to the Tokyo Stock Exchange, the Financial Services Agency, the Ministry of Land, Infrastructure, Transport and Tourism, the licensing administrative agency, major shareholders, and the accounting auditor?
14. Can you explicitly state that you will not take any retaliatory actions—such as identifying the whistleblower, transferring, demoting, or terminating employees who are aware of this matter?
15. Will Mr. Makoto Watanabe and the executives involved in this matter be excluded from the processes of preserving evidence, interviewing relevant parties, selecting an investigative firm, and approving the investigation results?

Open Questions to Face Audit Corporation, the Ministry of Land, Infrastructure, Transport and Tourism, and Law Enforcement Agencies

1. Did Faith Audit Corporation become aware of the splitting, retroactive alteration, and double-counting of invoices by HOTEL STUDIO Co., Ltd.?
2. If you became aware of this, when and how did you bring it to the attention of management, the Audit and Supervisory Committee, and the Board of Directors?
3. Did you include HOTEL STUDIO Co., Ltd.’s sales, construction contracts, and transactions with affiliated companies in the scope of the audit procedures?
4. Are you aware that Makoto Watanabe made remarks to the effect that “I share common interests with the head of the auditing firm and can control him at will”?
5. Are there any conflicts of interest that could affect the independence of the audit, such as audit fees, other contracts, personal relationships, or other factors?
6. Have you confirmed that the company failed to disclose the facts after the auditing firm determined that accounting irregularities had occurred and demanded a public announcement and an apology?
7. Are the Ministry of Land, Infrastructure, Transport and Tourism or the relevant prefectural governments investigating HOTEL STUDIO Co., Ltd. and Last One Mile Co., Ltd. regarding their construction business licenses, contract awards, and invoice splitting?
8. If it is confirmed that a company has repeatedly undertaken construction projects exceeding the 5 million yen threshold without permission, will disciplinary actions and criminal proceedings be initiated under the Construction Industry Act?
9. Are the National Tax Agency and the prosecutor's office preserving contracts, invoices, accounting data, electronic file history, board of directors meeting minutes, and audit working papers of HOTEL STUDIO Co., Ltd.?
10. Will the same evidentiary standards used in the investigation of defendant Shukki Nakano, Satoshi Saito, and others be applied equally to HOTEL STUDIO, Inc., Makoto Watanabe, and the directors of the parent company?
11. For employees who were not involved in collusion, altering invoices, or destroying evidence—but were merely following instructions—do you clearly distinguish their liability from that of the person who gave the instructions?

Measures Sought by the Last Mile Labor Union

1. Last One Mile Co., Ltd. shall immediately place this matter on the official agenda of the Board of Directors and the Audit and Supervisory Committee.
2. Mr. Makoto Watanabe, an executive officer of HOTEL STUDIO Co., Ltd. and a director dispatched by the parent company, must be completely removed from the investigation and evidence management.
3. Conduct a third-party investigation by attorneys, Construction Industry Act experts, certified public accountants, and digital forensics experts who are independent of the company.
4. Compile a list of all construction projects from the company's founding to the present, including the total project cost, contracts, invoices, permits, clients, and scope of work.
5. Place a hold on invoices, contracts, accounting data, emails, chats, file history, board meeting minutes, and audit working papers.
6. Identify the person who ordered, approved, and executed the invoice splitting, retroactive modification, and collusion.
7. Re-verify all transactions between HOTEL STUDIO Inc., ThreeLike Inc., Leading Property Management Inc., Smile Inc., and other related companies.
8. If double counting, overstatement of sales, and omission of disclosure of related party transactions are confirmed, the financial statements, internal control report, and annual securities report must be corrected.
9. If a violation of the Construction Business Act is confirmed, the company itself must report it to the Ministry of Land, Infrastructure, Transport and Tourism, the licensing administrative agency, the police, or the public prosecutor's office.
10. If damage or contractual disadvantage is caused to the customer due to unauthorized acceptance of orders, provide refunds, re-execution, contract remediation, or other forms of damage recovery.
11. Investigate the assets, business, personnel, contracts, properties, and profits transferred from SHI Corporation to its affiliates, and verify their impact on bankruptcy creditors.
12. Prohibit retaliation, including searches, gag orders, transfers, demotions, dismissals, or any other retaliatory measures against employees who were forced to follow instructions, employees who pointed out problems, or investigation cooperators.
13. Establish a reporting channel where employees can independently consult with, submit records to, and explain circumstances to the company.
14. Disclose the investigation results, the amount of the correction, involved parties, disciplinary actions, reports to authorities, and recurrence prevention measures to employees, shareholders, business partners, major shareholders, the accounting auditor, and the market.

Even if you divide the invoices, you cannot divide the corporate culture.

The problem with HOTEL STUDIO Co., Ltd. began with the amount on a single invoice.

However, tracing that invoice leads all the way to a construction business license, a board of directors, an audit and supervisory committee, parent company executive officers, accounting auditors, double billing, internal controls, SHI's bankruptcy, asset transfers to related companies, and even investigations by the National Tax Agency and the public prosecutor's office.

Leaving about 1.7 billion yen in debt and creditors in SHI Co., Ltd., only the usable addresses, personnel, hotel management know-how, properties, and related parties are transferred to a separate legal entity, and from that lineage, HOTEL STUDIO Co., Ltd. is created.

Last One Mile Co., Ltd. will make the company a wholly owned subsidiary through a stock-for-stock exchange, and Makoto Watanabe will become the representative director.

And to boost sales, they take on unauthorized construction work, split the invoices, change the invoices retroactively when the illegality is pointed out, and demand that employees give the same explanation.

Since the same person, address, company, funds, and guiding principles have continued this far, this is no longer just a single poor judgment on Mr. Watanabe's part.

This is the corporate culture of Last One Mile Group Co., Ltd.

If the Board of Directors knew of the illegality, the Audit and Supervisory Committee pointed it out, and the accounting auditor also understood the problem, yet the receiving of orders, accounting, and disclosure continued, then every safeguard within the listed company group was used not to stop the wrongdoing, but to keep it going.

It is completely unacceptable that after Mr. Watanabe and close executives sold their shares and left, only the workers who followed orders on the ground are left behind in front of investigative authorities with altered invoices.

No matter how many invoices you split it into, a single construction work is still one.

No matter how many companies you divide into, if the same person continues to use the same address, the same personnel, the same assets, and the same methods, the liability will also be linked together.

Last Mile Corporation, please show the truth to the workers and the market, not just the numbers on the invoice.