Space Value HD restated ¥550M of overstated profit after ex-president's orders

An investigation into Space Value Holdings found the group had overstated consolidated net profit by ¥550m between the fiscal year ended March 2014 and the July–September 2018 quarter. The improper accounting stretched over a long period, and the company cautioned that the impact figure could still change as it published the year-by-year effect on past consolidated results.

Much of it was organised rather than accidental: cost-shifting between accounting periods was practised at 21 of the 48 business sites of construction subsidiary Nissei Build Kogyo. Overstated figures in a Malaysia multi-storey car park venture and in accrued payables for rental construction work also distorted results. At a hotel business in Yokohama, the investigation found the improper accounting was done on the orders of former president Morioka — and the report also acknowledged his ties with antisocial forces.

The former president directly ordered improper accounting at the hotel business.

Cost-shifting was organised, not isolated: 21 of 48 Nissei Build Kogyo sites did it.

Overstated payables and venture accounting went undetected for more than four years.

When a boss can direct the numbers and nobody pushes back, small period-to-period shifts compound into a restatement — and into questions about who else the boss answers to.

Morioka resigned as president on the 10th, taking responsibility. The company said past securities reports would be corrected on the basis of the findings, and warned that the ¥550m impact estimate could still move.