New Intelligent Workstation Systems, a Japanese IT solutions provider listed on the Tokyo Stock Exchange, discovered some irregularities and suspicious transactions in the interim financial statements for the half-year ending December 2007. The company has alerted the Tokyo Stock Exchange authorities and subsequently obtained permission to postpone the announcement of its interim financial results.
The Longreach Group, a private equity firm based in Tokyo and Hong Kong, invested $118 million in the company last year, making it the controlling shareholder with a 67 percent stake. The buyout firm was selected as the preferred bidder for the investment along with Phoenix Capital, a Tokyo-based private equity firm. The deal led to a change in the management of the company.
A spokeswoman for Longreach confirmed that there were certain suspicious transactions and possible accounting fraud in its portfolio company’s financial statements. She said that the irregularities stem from the time when the old management was still in place, and that the new management of NIWS is taking extensive steps to get to the bottom of the irregularities. An exhaustive investigation is underway, and Longreach is working closely with the new management, she added. The spokeswoman said that the management of NIWS is also preparing a new business plan and will be taking steps on internal control.
The chief financial officer of NIWS, Hiroki Okimoto, told PEO that the company hoped to complete its investigation and disclose everything by the end of this month, or by early April and maintained that the financial irregularities stemmed from the tenure of the previous management.