Abalance Corporation (TSE: 3856) told the Tokyo Stock Exchange on August 24 that its board has called an extraordinary general meeting for September 30, because its own auditor would not certify the numbers a normal annual meeting is supposed to rubber-stamp.
On August 18 the company's accounting auditor issued a disclaimer of opinion, refusing to sign off on both the audit report and the internal-control audit report for the year ended March 31, 2026. The auditor said it could not obtain sufficient, appropriate evidence covering three things: the accuracy and completeness of group-wide accounting for paid-supply transactions, the design and operation of internal controls, and the assumption that Abalance can continue as a going concern.
That refusal has a specific legal consequence for Abalance. Because the disclaimer meant Abalance did not meet the conditions set out in Article 438, Paragraph 2 of the Companies Act, it could not treat the financial statements as a reporting item at its ordinary annual meeting, and instead needed shareholder approval for them directly. So Abalance is convening a standalone meeting, at AP Shinagawa on the eighth floor of the Shinagawa Tokyu Building in Minato Ward, at 1pm on September 30, with a July 31 record date, to walk shareholders through the year's business report, consolidated statements and the circumstances behind the disclaimer, then ask them to vote approval as the sole agenda item.
| Item | Detail |
|---|---|
| Auditor disclaimer date | August 18, 2026 |
| EGM date and time | September 30, 2026, 1:00 pm |
| Location | AP Shinagawa, Shinagawa Tokyu Building 8F, Konan, Minato Ward, Tokyo |
| Record date | July 31, 2026 |
| Sole agenda item | Approval of the 27th-term (April 1, 2025 to March 31, 2026) business report and financial statements, and the audit results |
The disclaimer did not come out of nowhere. Since September 2025, Abalance has had a third-party committee and a separate verification committee examining the propriety of its historical accounting for paid-supply transactions. That work led to corrections of prior-period results and, on July 31, 2026, a published improvement plan covering stronger management oversight, a rebuilt internal-control system and efforts to raise compliance awareness across the group. The auditor's August verdict suggests those fixes have not yet closed the evidentiary gap for regulators to accept the numbers as reported.
Two details keep this unresolved rather than tidied up. First, Abalance says its contract with the same auditor for the year ending March 2027 is still under negotiation. Second, the disclaimer forced Abalance to scrap a previously scheduled continued session of its 27th ordinary annual meeting, which it had announced back on May 25, 2026; that session is now cancelled outright and folded into the September 30 extraordinary meeting instead. For a Standard-market issuer, asking shareholders to approve accounts the auditor won't vouch for is an unusual position to be in, and the September 30 vote is the mechanism, not the resolution, of that problem.