The encyclopedia · Finance & Accounting · Financial decision · 2024–2025
alt Inc. inflated sales to go public in Tokyo, then SESC accused it of fraud
Tokyo AI startup alt Inc. allegedly booked fictitious sales to secure its Growth Market IPO; the SESC filed a criminal fraud accusation in October 2025.
alt Inc. · 2025-10
What happened
alt Inc. was a Tokyo-based artificial-intelligence startup whose main product was AI Gijiroku, an automated meeting-transcription service. After launching the service in 2020, the company reported sales rising more than 100-fold in four years, with the transcription service accounting for up to 90 percent of revenue. This growth helped it list on the Tokyo Stock Exchange Growth Market in October 2024.
In 2025 a whistleblower triggered an SESC investigation. The regulator found that for its 2022, 2023 and first-half 2024 financial statements, alt had reported sales of roughly ¥2.7 billion, ¥4.1 billion and ¥2.8 billion when the actual figures were about ¥243 million, ¥395 million and ¥498 million. For the full year 2024, actual net sales were about ¥1.1 billion, while the company reported ¥6.1 billion. The alleged scheme involved routing money through collaborators who bought AI Gijiroku accounts and cycled the funds back; many of those accounts were reportedly inactive.
On October 28, 2025, the SESC filed a criminal accusation against alt Inc. and four current or former executives for submitting false securities registration statements and a false annual securities report. The Tokyo Stock Exchange designated the shares for delisting, with delisting effective August 31, 2025. The company also entered civil rehabilitation.
Why it happened
- The startup's reported revenue growth was the main evidence used to justify its Growth Market IPO
- Sales of the flagship product were allegedly inflated through round-trip transactions with collaborators rather than genuine customers
- Many purchased accounts were inactive, making the fictitious nature of the revenue visible once investigators looked at usage
- Internal controls and audit procedures failed to catch or prevent the repeated overstatement across multiple reporting periods
The lesson
Revenue growth built on round-trip transactions is not growth; it is a countdown to delisting, once a regulator or whistleblower checks who is actually using the product.
Aftermath
The Tokyo Stock Exchange delisted alt Inc. in August 2025 and the company entered civil rehabilitation. The SESC criminal accusation named the company and four executives; if convicted, the company faces a fine of up to ¥700 million and individuals face up to ten years imprisonment.
Sources
- Securities and Exchange Surveillance Commission — Accusation Regarding the Submission of False Securities Registration Statements etc. related to alt Inc.
- The Asahi Shimbun — Tokyo AI firm probed after inflating sales
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