[Last One Mile Labor Union] Connecting Makoto Watanabe's papers sent to prosecutors, tax investigation, listing review explanation, and accounting fraud into one thread

What is the Tokyo Stock Exchange waiting for?

Last Mile Inc. has not specifically explained to the market the fact that Makoto Watanabe, Representative Director, Chairman and CEO, has been referred to prosecutors on suspicion of violating the Financial Instruments and Exchange Act.

The company has also failed to provide shareholders with a specific explanation regarding the fact that large-scale simultaneous audits were conducted by the national tax authorities in Tokyo and Fukuoka against Mr. Watanabe personally, Last One Mile Inc., and related parties.

However, the issue that the Tokyo Stock Exchange needs to examine is not whether words like "referral of documents to prosecutors" or "national tax inspection" are written in the list of timely disclosure items.

In the case involving the document transmittal of Mr. Watanabe to the prosecutors, the current employees, business partners, secretarial functions, and credibility of Last One Mile Co., Ltd. as a listed company were utilized for investment solicitation. The investigation by the national tax authorities has expanded not only to Mr. Watanabe personally, but also to Last One Mile and its associates, and has even progressed to the seizure of assets from the person in charge of accounting.

Furthermore, the gender of outside directors at the time of the listing review, capital outflow via affiliated companies, conflict-of-interest transactions, suspected accounting irregularities at HOTEL STUDIO, statements about selling shares after learning unpublished information, statements about being able to "suppress" the audit firm, and the search for and sanctioning of whistleblowers all connect to the internal controls of the same representative and the same company.

If you separate them one by one, you might be able to say, "It's an individual's problem," "It's an outside company's problem," "It's a problem from the past," or "We cannot answer because it's under investigation." However, if you connect them all together, there is only one question the Tokyo Stock Exchange needs to confirm.

Did Last One Mile Co., Ltd. present an accurate corporate image to investors from the time of its listing to the present?

What the TSE should be looking at is not the word "referred to prosecutors," but the connection to the company.

Not every listed company immediately makes a timely disclosure just because its representative director has been referred to prosecutors over a private-life incident.

However, this is not purely a matter of the representative's private life.

• Many current employees, business partners, and related parties of Last One Mile Inc. were included among those targeted for solicitation.
• Makoto Watanabe used his title and credibility as the representative of a company listed on the TSE Growth market.
• Watanabe's private secretary and the person connected to the secretarial functions of Last One Mile Inc. handled the practical operations.
• Fundraising took place even before the registration of LG Asset Co., Ltd., which was explained as a financial instruments intermediary service provider.
• The investment funds were transferred to an account in Mr. Watanabe's personal name.
• There is a record indicating instructions were given to treat the repayment not as the return of capital contributions, but as the repayment of a loan.
• Even after the document transmittal to the prosecutors, the Board of Directors and the Audit and Supervisory Committee have failed to conduct an independent investigation or provide explanations to the market.

Since company employees, business partners, secretarial functions, titles, and credibility were used as the gateway to the incident, the referral of the documents cannot be contained within the box of being "a matter concerning the representative personally."

What the TSE needs to examine is not the name of the disciplinary action itself—namely, the referral of the case to prosecutors—but the connection between the incident and the listed company's operations, internal controls, executive eligibility, and investor decision-making.

Seven Listing Eligibility Files the TSE Should Check Immediately

1 How was Makoto Watanabe's outside director independence explained in the listing review?

Makoto Watanabe is said to have given specific instructions regarding the business, budget, personnel, business partners, and affiliated companies of Last Mile Inc. since 2018, despite being treated as an outside director until immediately before the IPO.

Furthermore, there is internal information that when the Tokyo Stock Exchange raised doubts about Mr. Watanabe's outside director status, Mr. Watanabe instructed Kohei Ichikawa, Satoshi Saito, and others to "pretend that he was not an outside director in the first place, but a part-time director, and stick to the lie no matter what."

In the final initial listing application, the designation "outside" was removed from Mr. Watanabe's title, and he was listed as a regular director.

What the TSE needs to check is not just what was written in the final documents. It is comparing the questions during the review process, initial responses, revision history, supporting materials, and meeting records to determine whether the actual situation was accurately explained or if titles were merely swapped out after the issues were pointed out.

2 Capital outflows and conflict-of-interest transactions via related companies

The Last One Mile Labor Union is investigating suspected fund outflows of approximately 46.2 million yen over a 33-month period from March 2019 to November 2021 via Broad Support Co., Ltd.

Furthermore, there is also the issue that Mr. Watanabe used the advertising expenses, personnel, customer base, and credit of Last One Mile for Best Mirai-cle Co., Ltd., where he is referred to as "Owner Watanabe."

These are not merely expense reimbursement issues.

• Was the company effectively controlled by Mr. Watanabe reported as a related party?
• Was it approved by the board of directors as a conflict-of-interest transaction?
• Did Mr. Watanabe exclude himself from the deliberations and resolutions?
• Have the expenses borne by the company and the profits attributed to Mr. Watanabe been accounted for?
• Have you accurately stated them in the securities report, related party information, and listing examination materials?
• Did you explain the substantive control relationship to the accounting auditor and the lead managing securities company?

What the TSE needs to check is not the company name on the contract, but the company that paid the expenses, the company that benefited, and the person who drove both.

3. Suspicion of accounting fraud at HOTEL STUDIO and pressure on the auditing firm

Regarding HOTEL STUDIO Co., Ltd., issues have been raised regarding the suspicion of splitting unauthorized construction work into invoices of under 5 million yen, the suspicion of inflating sales between related companies, and collusion to conceal the alteration of invoices.

Furthermore, there is internal information that even when pointed out by Faith Audit Corporation, Makoto Watanabe explained to executive management that "interests are aligned with top management Nakagawa, and he can be controlled freely."

This problem is not just about the separate accounts of the subsidiary.

• Accuracy of consolidated financial statements.
• Assessment of the internal control report.
• Independence of accounting auditors.
• Management override of internal controls.
• Supervisory function of the Audit and Supervisory Committee.
• Timely disclosure decision after fraud recognition.

What the TSE needs to check is not whether the company ultimately obtained an audit report, but rather what the audit firm pointed out, what management concealed, and what changed in the process leading up to the audit opinion.

4 Simultaneous investigations by tax authorities and seizure of accounting participants

According to the facts known to our union, large-scale simultaneous audits were conducted by national tax authorities in Tokyo and Fukuoka against Last One Mile Inc. and related parties.

There is information that the targets of the investigation were not limited to Makoto Watanabe as an individual, but also extended to his company and related parties, and subsequently, the Tokyo Regional Taxation Bureau also seized assets related to Satoshi Saito, a certified public accountant who had been leading the accounting for Last One Mile.

The mere fact that a tax audit has been conducted does not immediately establish wrongdoing. What the Tokyo Stock Exchange should confirm are the following points:

• Were the company's books, devices, contracts, officers and employees, and related companies subjected to an investigation?
• Were there any findings that affect the company's financial reporting, tax processing, or related-party transactions?
• Have you officially reported to the Board of Directors, the Audit and Supervisory Committee, and the accounting auditor?
• Have you considered the need for internal control evaluation and disclosure?
• Did you adjust the accounting treatment, tax return, financial statements, or internal control report after the investigation?
• Does the TSE keep a record of the decision-making process for failing to explain to the largest shareholder and investors?

Despite the national tax authorities showing widespread interest in the company's accounting and related parties, if the board of directors conducted neither an independent investigation nor provided an explanation to the market, the issue lies not in the presence or absence of a tax audit, but in the subsequent inaction of the board of directors.

5 Stock sale statements after learning unpublished information and information dissemination to executives

Makoto Watanabe is reported via whistleblowing to have said, after obtaining information regarding the indictment of defendant Kazuyoshi Nakano, to the effect that "I was the only one who sold first," and subsequently spread the same information to Last One Mile executives, calling it "insider information."

This is not just a problem for the Securities and Exchange Surveillance Commission.

This is an issue directly tied to the Tokyo Stock Exchange's listing eligibility and corporate code of conduct, specifically regarding whether information acquisition by the Representative Director, stock trading, internal communication, management of officer and employee trading, material fact management, insider registration, and reporting to the Board of Directors were functioning properly.

If the company fails to suspend trading of the subject stock, identify the recipients of the information, preserve evidence, and report to authorities even after becoming aware of the matter, not only the representative's personal trades, but the company's internal control system itself will become subject to investigation.

6. The issue of failing to protect whistleblowers and continuing the witch hunt and sanctions

Information has been received that in the last mile, whenever whistleblowing pointing out fraud occurs, prior to an independent investigation of the reported content, actions such as identifying the whistleblower, checking devices, conducting hearings, reassignments, evaluation changes, and other sanctions have been carried out.

Meanwhile, it is alleged that Mr. Watanabe's close aides and executives who were accused of wrongdoing were protected rather than facing formal accountability.

The whistleblower system is the company's last line of defense for the early detection of wrongdoing. A company that penalizes whistleblowers and allows executives accused of wrongdoing to control the investigation is effectively building an internal control system that eradicates the very leads to wrongdoing.

What the TSE needs to check is not whether the box called a whistleblowing hotline exists.

After receiving the report, who investigated, who looked for the whistleblower, who was disciplined, and who was protected.

7. Can the Mamizuka Memo and Defendant Takuoki Nakano be handled as "outsiders"?

The Mamizuka Memo contains a table of contents titled "Overview of Fraud by Last One Mile Group, Inc.," which outlines Last One Mile, Inc., Mr. Makoto Watanabe, Mr. Satoshi Saito, related corporations, fund transfers, and prospects for "accusation, indictment, and arrest."

https://globalunion-grp.org/okami/archives/248

Numerous reports indicate that Defendant Kazuyoshi Nakano frequently visited Last One Mile and, in coordination with Mr. Watanabe and Mr. Saito, was involved in funding, accounting, external acquisitions, shares, and dealings with the National Tax Agency and prosecutors.

If they handled it while being aware of these facts by claiming that "Defendant Nakano is an outsider who is neither an employee nor an officer, and therefore has no relation to the company," what the TSE should verify is not the formal employment relationship.

• To what extent Defendant Nakano had access to company facilities, executives, employees, business partners, and affiliated companies.
• Did you use the company's credit, unpublished information, funds, shares, and human networks?
• When the management team became aware of its involvement.
• Have you reported to the Board of Directors, the Audit and Supervisory Committee, the accounting auditor, the principal shareholder, and the TSE?
• Did you perform relationship termination, evidence preservation, related party verification, and anti-social forces checks?

If a person without a title was running the company, the lack of a title is not proof of having nothing to do with the company. It is proof that someone existed who could run the company from outside internal controls.

The delisting warning issued by JPX itself: "Concentration of authority, deference to superiors, related-party management, and delayed disclosure"

Principles for Responding to Misconduct by the Japan Exchange Regulationrequire that when a listed company becomes aware of a scandal or suspected scandal, it must uncover the facts and root causes through a necessary and sufficient investigation; if there are doubts regarding the management's credibility or internal controls, it should consider establishing a third-party committee equipped with independence, neutrality, and expertise; and it must disclose information promptly and accurately starting from the initial stage of awareness.

This principle itself is not a standard for immediate disciplinary action without a basis in regulations. However, this issue does not end with mere philosophy.

There are overlapping specific regulatory issues: explanations for IPO screening, related-party transactions, financial reporting, internal control reporting, timely disclosure, insider information management, auditor independence, and retaliation against whistleblowers.

Furthermore,The case where the Tokyo Stock Exchange decided to delist Abalance in August 2026Now, the following circumstances are specifically pointed out:

• Effective authority was concentrated in the former Representative Chairman and CEO.
• The conditions that caused officers and employees to anticipate the former representative's wishes, become intimidated, and stop thinking were left intact.
• There was a lack of ethical awareness among officers and employees regarding related-party transactions.
• Important information was not communicated to the company in a timely manner, resulting in continuous delays in timely disclosure.
• The lack of internal controls was pointed out in the audit report.
• No improvement was expected in breaking away from the concentration of authority in the representative.

Concentration of power in the representative, deference and intimidation among close aides and other officers and employees, related-party transactions, delayed information disclosure, and accounting audit issues.

This strikingly overlaps with the issues that the Last One Mile Labor Union is currently pursuing.

If the Tokyo Stock Exchange does not investigate upon receiving this information, it is necessary to explain why Lastmile Works, Inc. is not examining the structure that Abalance treated with such severity that it led to delisting.

The documents that the TSE needs to acquire can already be identified.

This is not an issue that can only be understood by asking for opinions or personal evaluations. The materials that the TSE should request from the company are already clear.

• All questionnaires, response documents, revision histories, interview records, and officer-related materials from the IPO review.
• Materials regarding Makoto Watanabe's outside director status, part-time director status, and business execution.
• The date and time the Board of Directors became aware of Mr. Watanabe's document referral, the reporting materials, and the disclosure consideration records.
• Simultaneous tax authority audits, seizure of documents, inquiries, amended tax returns, and recording of accounting impacts.
• List of transactions with related companies including Broad Support, Best Miraicle, HOTEL STUDIO, and others.
• Related party questionnaire, conflict of interest declaration, board of directors approval, and determination of disclosures in the annual securities report.
• Audit findings, unadjusted misstatements, management representation letters, and Audit and Supervisory Committee reports with Faith Audit Corporation and EY ShinNihon.
• Securities trading and records of the acquisition and transmission of undisclosed information by Mr. Watanabe himself, his relatives, close aides, and related corporations.
• Internal reporting, whistleblower investigation, personnel reassignment, performance evaluation changes, and disciplinary records.
• Board of Directors report regarding the Mamizuka memo, defendant Kakuki Nakano, Mr. Satoshi Saito, and contacts with the national tax authorities and prosecution.
• Record of the decision not to report the issues in this matter to the Tokyo Stock Exchange, the accounting auditor, the principal shareholder, and the financial authorities.
• Data deletion, device replacement, explanation changes, minutes revisions, and contact with related parties carried out after the publication of this and past articles.

If you put these in chronological order, you can see when the company learned of the problem, who stopped the investigation, who decided disclosure was unnecessary, and who profited.

Open Questions to the Board of Directors of the Tokyo Stock Exchange and Lastmileworks Co., Ltd.

Open Letter to the Tokyo Stock Exchange and Japan Exchange Regulation

1. Have you received information regarding the referral of Makoto Watanabe to the prosecutor's office, as well as the use of employees, business partners, secretarial functions, and credit of Last One Mile Inc.?
2. Do you know about the large-scale simultaneous investigation by the national tax authorities into Last One Mile Inc. and related parties?
3. Will you re-verify the questions, answers, and revision history from the listing review regarding Mr. Watanabe's outside director nature?
4. Will you compare the initial listing application documents with internal records regarding the possibility that explanations inconsistent with facts were given during the listing review?
5. Shall we check related party disclosures and conflict of interest management regarding Broad Support, Best Miraicle, HOTEL STUDIO, and other affiliated company transactions?
6. Do you confirm the independence of the audit and the reliability of financial reporting regarding Mr. Watanabe's remark that Faith Audit Corporation can be "suppressed"?
7. Will you investigate Mr. Watanabe's stock sale remarks and the internal spread of unpublished information in cooperation with the Securities and Exchange Surveillance Commission?
8. Shall we review the search for whistleblowers, adverse personnel actions, and control of investigations by management from the perspective of corporate codes of conduct and internal control systems?
9. Do you demand an independent third-party investigation, preservation of evidence, and progress disclosure to the market from the company?
10. Depending on the survey results, will you consider improvement reports, specially designated shares, penalties, disclosure measures, listing maintenance reviews, or other responses?
11. Without conducting an investigation, can you explain the differences from the concentration of authority, deference and intimidation, related-party management, and disclosure delays that were identified as issues at Abalance?

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

1. When, from whom, and through which materials did you learn about the referral of Mr. Makoto Watanabe to the prosecutors?
2. Did you investigate the relationship between the case involving the referral of documents to the prosecutors, and the company's employees, business partners, secretarial functions, and reputation?
3. Have you officially reported the simultaneous tax investigation by the national tax authorities to the Board of Directors, the Audit and Supervisory Committee, and the accounting auditor?
4. Have you reported the document referral, national tax investigation, Mamizuka memo, capital outflow, suspected accounting irregularities, and relationship with Defendant Tamaki Nakano to the Tokyo Stock Exchange?
5. If it has not been reported, who decided that reporting was unnecessary, and based on which documents and legal opinions?
6. Were Mr. Watanabe's title, authority, and duties concerning business execution at the time of the listing review consistent with the facts at that time?
7. Have you accurately reported related-party transactions and substantial control relationships in the related-party questionnaire, the securities report, and to the accounting auditor?
8. Clarify the observations, uncorrected items, and disclosure requirements received from Faith Audit Corporation.
9. Will Mr. Watanabe be excluded from the selection of the investigation contractor, evidence management, interviewing related parties, and approval of the investigation results?
10. Will you conduct an independent third-party investigation across all issues and disclose the progress before the shareholders' meeting?
11. Will you immediately stop searching for and retaliating against whistleblowers, informants, and investigation collaborators?
12. Depending on the investigation results, will you make corrections to prior-year disclosures, dismiss officers, recover damages, and report to the TSE?

Measures Sought by the Last Mile Labor Union

1. The Tokyo Stock Exchange and Japan Exchange Regulation shall commence a formal review regarding the listing eligibility of Last One Mile Co., Ltd.
2. Request the company to submit the IPO review responses, board of directors meeting minutes, related-party materials, audit records, whistleblower records, and securities trading records.
3. Calling for the establishment of a third-party committee independent of Makoto Watanabe and other parties.
4. Review across the board for document referral to prosecutors, national tax audits, affiliated company transactions, suspected accounting irregularities, insider information management, and whistleblower retaliation.
5. Share necessary information with the Securities and Exchange Surveillance Commission, the Financial Services Agency, the Japanese Institute of Certified Public Accountants, the accounting auditor, and the principal shareholder.
6. Last Mile Inc. shall preserve all electronic data, securities transactions, accounting, audits, responses to national tax authorities and prosecutors, and listing examination records.
7. Remove Mr. Watanabe from Internal Audit, the Risk and Compliance Committee, evidence management, and investigation response.
8. Promptly disclose to the market the timing of problem recognition, the investigating entity, the matters confirmed, the disclosure decision, and future plans.
9. Prohibit unfavorable treatment of whistleblowers and investigation cooperators, and re-examine past disciplinary actions.
10. Depending on the findings of the investigation, we will correct past-year disclosures, take disciplinary action against executives, seek damages, reappoint the auditing firm, and fundamentally rebuild our internal controls.

The purpose of the Tokyo Stock Exchange is not to pretend not to have seen information that arrived after listing.

What we are asking the Tokyo Stock Exchange to do in this matter is not to determine the guilt or innocence of Mr. Makoto Watanabe in place of a criminal trial.

The purpose is to verify whether the information disclosed by the company at and after the IPO was accurate, whether financial reporting and internal controls functioned properly, and whether authority was concentrated in the Representative Director, resulting in the Board of Directors, the Audit and Supervisory Committee, and the accounting auditors becoming mere shells.

In its corporate governance report, Last Mile Works Co., Ltd. itself emphasizes transparency, fairness, and soundness, declares that it implements all basic principles of the Corporate Governance Code, and promises prompt, accurate, and fair information disclosure.

That declaration and the reality of failing to explain the document referrals to prosecutors, National Tax Agency inspections, capital flight, suspected accounting irregularities, pressure on the auditing firm, dissemination of insider information, and sanctions against whistleblowers to the market cannot coexist.

The Tokyo Stock Exchange's Listing Eligibility Information Reception Desk exists to receive information regarding disclosure by listed companies, corporate code of conduct, and potential violations of delisting criteria.

If nothing is done after receiving information, the help desk ceases to be a market surveillance mechanism and instead becomes a warehouse that quietly stores whistleblower materials.

What the Tokyo Stock Exchange should look at is not the single phrase "referral of documents to the prosecutors."

It is a single, continuous structure consisting of de facto control continuing from before the listing, explanations for the listing review, the flow of company funds, audit independence, the suppression of whistleblowing, and the use of unpublished information.

If the TSE does not act now, what will be questioned later is not just the accountability of Last One Mile Co., Ltd.

Facing this many clues, what did the Tokyo Stock Exchange, as the market supervisor, check and what did it overlook? This gets to the very raison d'être of the Tokyo Stock Exchange itself.