The "disclosure boomerang" that returns to the last mile
The story is surprisingly simple.
If it is not disclosed to the market as "not important," it should not be referred to as an important incident within the company either.
On the contrary,
If the CEO himself is telling senior executives that the former officer will be arrested for actions taken while in office and will be prosecuted, why can that issue be treated as “non-important information” to shareholders and investors?
What is now coming back to Last Mile Inc. is this extremely simple question.
According to the company's website, Watanabe Makoto currently serves as Chairman and CEO.
At the time of the forced interrogation, we decided it wasn't important. So then, it still might be useful.
At the time in the past, other officers were
"I don't know the details yet."
"It's just a matter of the former officer's personal problems"
"It won't affect the company's operations or finances"
"Not to the extent that it significantly influences investors' investment decisions."
We determined that this was the case, and consequently did not disclose it in a timely manner.
Regardless of whether that judgment was correct, it is understandable from a logical standpoint.
The problem is:Now."That is so.
According to information received from executives to the union, Watanabe himself is said to have been discussing the possibility that the former official may be arrested and charged in connection with his actions during his final term in office.
Furthermore, I have also heard that there were statements indicating that they had knowledge of the details of the criminal case, including the charges against the defendant.
Of course, the union does not conclude that the former officer committed a crime or that he will be arrested and prosecuted in the future.
The decision is made by the investigative agencies and the courts, not by Mr. Watanabe or this union.
But here another problem arises.
Why can a company like Last Mile, whose CEO, Watanabe, takes such an important issue as this seriously enough to speak about it in so much detail, treat it as something that is not important to the market?
This is it.
"It's not my business because I'm an outgoing officer" is not an answer.
There is an extremely important point.
If the issue is that it is a completely private matter after the resignation, then it is a different matter.
But the very content that Mr. Watanabe is said to have mentioned,
Actions by former executives during their final days in office
That is the case.
That's what makes the difference.
Whether a former officer is currently employed by the company and whether the problematic behavior took place while they were employed by the company are entirely separate issues.
The TSE’s system of timely disclosure also does not rely solely on the question of whether that person is still a director.
The Tokyo Stock Exchange also requires that, in addition to the individually listed disclosure items,
Any important fact regarding the company's management, operations, assets, or listed shares that significantly affects investors' investment decisions.
If that occurs, we will request disclosure.
This is the so-called basket clause.
Moreover, even if the individual disclosure items do not apply or the minor criteria are met, the basket clause remains applicable.It needs to be considered constantlyIt is explicitly stated.
In other words,
"I'm the one who quit already"
This system does not end with just one word.
The question is:
What is it that they are supposed to have done?
When was it held?
What is the relationship between the company's operations and this?
Does it relate to the company's own transactions, accounting, tax, and internal control?
And to what extent does that information influence investors' decisions?
That is so.
And if they even go as far as saying "arrested and charged," the conversation will only come back to them.
This is where the biggest boomerang comes in.
Assuming that Mr. Watanabe is
"It's just an old problem."
It has nothing to do with the company.
"It's not an important matter."
If you are consistently thinking in this way, then you still understand it.
However, on the other hand, to active executives,
"Former officer arrested for actions while in office"
"Will be prosecuted"
"I am aware of the contents of the indictment"
Since we are talking about this subject, the story takes a different turn.
Isn’t it the management top themselves who are responsible for handling such a serious future event?
Of course, simply assuming that a representative is significant does not automatically create a legal disclosure obligation.
However,
Consistency between the company representative's own perception and the company's important decision regarding the market
It must of course be explained.
"Within the company, it's serious enough to even mention arrest and prosecution, but it's not important enough to affect investment decisions for the market."
If that's the case,
It is sufficient to explain the boundaries.
Rather, that is all that matters.
As much as they say "they will be arrested," the stronger the argument becomes that "then why not disclose it?"
This is the special thing about this issue.
Usually, the company will not disclose the reason for not disclosing it.
"It was of low importance"
It can be explained as follows.
However, the company’s representative director himself spoke about the former executive officer,
Arrested.
Indictment filed.
Criminal case.
Actions taken while in office.
If we use extremely heavy words to discuss this topic internally, the explanation will gradually become more difficult.
Because,
Why would the representative director keep tracking down and learning the details of events that are not important to the company until now, and even telling the executives about them?
That naturally raises the question:
If you treat former executives as being involved in serious incidents, as if they were,
The question of what that former official was doing during his tenure also becomes significant.
And if the actions taken during that period of time are related to company operations,
What did the company know?
What did the board of directors know?
What did the Audit and Supervisory Committee review?
What did you tell the accounting auditor?
Who considered whether or not timely disclosure should be made?
We go right back to the problem.
This is the "disclosure boomerang" engineered by Watanabe Makoto.
The TOSE rules are not "safe because there are no item names"
This point is also extremely important.
There is no section titled "When a former officer becomes the subject of a criminal case."
Therefore, no disclosure is required.
It's not such a simple system.
The Tokyo Stock Exchange itself clearly explains that even if the facts do not apply to individual items, if their impact on investment decisions is significant, disclosure may be required under the basket clause.
In fact, even if a current officer were to file a lawsuit, the Tokyo Stock Exchange has not stated that “since they are officers, automatic disclosure is required,” nor that “since it is not a lawsuit against the company itself, disclosure is not required.”
Even if it does not fall under any individual litigation item,It asks to re-evaluate the necessity of disclosure as "other important facts that have occurred."
From this point of view, at least,
Excluded from consideration because they have already retired
That arrangement does not necessarily follow.
Rather,
Is it the conduct of a former officer during their term of office?
Does it relate to the company's business, accounting, or taxes?
Did the company itself undergo an investigation?
Does it involve multiple executives and employees?
Could this lead to doubts about the company's governance or internal controls?
Is there a possibility that investors would change their investment decisions if they knew this?
will be judged on that substance.
Even the TSE itself has issued a warning, stating that numerous disclosure omissions have occurred due to overlooked basket clauses.
I am asking for your current judgment, not your past one.
We must not misunderstand this.
What our union is hearing is
It is not just a matter of "why wasn't it disclosed a few years ago?"
If at that time,
It's not a big deal.
may choose not to disclose it as
However, if Makoto Watanabe subsequently acquired new information and told the executives, that would change the story.
The Tokyo Stock Exchange explains that regarding "other important corporate events," it is necessary to check whether disclosure is required at the time the company recognizes the occurrence of such events.
In other words,
I now know what I didn't know back then.
Or
What I once thought was unimportant, the representative director himself now takes so seriously that he uses the words "arrest and indictment."
If that is the case,
The issue now arises of re-evaluating whether timely disclosure is necessary at this point.
Failure to disclose in the past is not a license for permanent non-disclosure thereafter.
If you want to talk about the "crime committed by a former executive," you need to explain the "relationship with the company" as well.
This is the fairest.
Regarding Mr. Watanabe and the former executive,
involved in a crime
be arrested
"Will be prosecuted"
If you are thinking along those lines, the company should conduct a thorough investigation.
And if it truly is a problem from during the Last One Mile tenure,
Explaining even our relationship with the company to the market.
Conversely,
It is unrelated to the company.
It does not even affect investment decisions.
It is unrelated to both corporate finance and internal controls.
It has nothing to do with the other board members.
If you have concluded that,
I will explain the basis for that decision.
Either is fine.
The most unnatural thing is
Using the "serious criminal case during tenure" argument only when attacking a former executive, and dismissing it the moment a company disclosure issue arises by arguing "they've already left, so they have nothing to do with the company."
Now there are two yardsticks.
What is required for listed company compliance is not a yardstick that changes from person to person.
Applying the same standards to the same facts.
Just answer five questions and it's over.
There aren't many things I want to check with Last Mile Corporation.
First.
Did Mr. Watanabe say that the said former officer could be arrested and prosecuted on the grounds of “actions during his last-mile tenure”?
Second.
When and from where did the company obtain that information?
Third.
Is that activity related to the operations, transactions, accounting, tax, internal control, or other aspects of the management of the company of the company Last Mile?
Fourth.
Based on the information currently available, have you reconsidered whether to provide timely disclosure, including the “other important events” under Article 402 of the TSE Listing Regulations?
Fifth.
If you decided that disclosure is not necessary as a result of your consideration, what is the reason for that?
Now that it has come to light, why haven’t you disclosed and reported the information that Mr. Watanabe Seito has been emphasizing?
That's all there is to it.
In the end, your own words come back to you.
It is free to pursue former officers.
It is also free to take legal action.
If the company has been harmed, it is of course also necessary to conduct a thorough investigation.
But as the representative of a publicly listed company, there is one thing that we must not forget.
As the more he talks about it, the more serious the matter becomes, the next thing the market will hear is:
"If there are such serious issues during the term of office, why doesn't the company disclose them?"
That is the case.
The ball thrown at the former officer doesn’t end there.
In a publicly traded company, that ball travels around the market and returns to the manager himself.
This is the world of disclosure.
And what is being questioned this time is not whether the former officer was a good person or a bad person.
Can Last Mile Co., Ltd. be a company that can apply the same compliance standards to itself?
That's all there is to it.
Many executives routinely view Watanabe Makoto's emotional and shallow language and ridicule him as a "wild bee" who is completely incapable of managing things.