BlueMeme Inc. (TSE: 4069), the Tokyo-based developer of low-code software tools, has published the public version of a special investigation committee's report concluding that its former chief executive engineered a scheme to book a free transaction as a paid sale, inflating results years before the company's stock listing.
The committee found that the software components covered by a ¥30mn licence agreement, signed with an outside company and dated March 30, 2020, were genuinely delivered. But it found the deal was not a real paid sale: the ¥30mn consideration was, in substance, to be returned to the counterparty by other means, making the transaction free rather than one done for value. The company's then-representative director and its then-head of management administration deliberately concealed supporting documents so that this free transaction could be booked as a paid sale, the committee concluded. Investigators classified the conduct as fraudulent financial reporting, not an accounting error.
The deal was struck while BlueMeme raced to meet revenue and profit conditions that its original IPO sponsor had set as a precondition for a target 2020 listing. Internal messages cited in the report show executives discussing an ¥85mn arrangement with the same counterpart, later split into the ¥30mn "common parts" licence booked in the year to March 2020 and a ¥55mn "exclusive rights" fee that was dropped once the pandemic hit the counterparty's parent group's core business. That 2020 listing plan collapsed soon afterward; BlueMeme eventually went public in June 2021 under a different adviser. A written pledge, signed personally rather than in an official capacity by the company's then-representative director, promised to return the ¥30mn to the counterparty through inflated subcontracting rates on unrelated work, the committee found. Investigators separately examined a ¥27.6mn licence sale to another customer that the company had booked a day early, in March rather than April 2020, a case the company's May disclosure attributed to a timing error.
The immediate financial reckoning falls on the year in which the false sale was recorded.
| Metric | Originally reported | Revised (provisional) | Change |
|---|---|---|---|
| Revenue | ¥1,800mn | ¥1,743mn | -¥57mn (-3.2%) |
| Operating profit | ¥31mn profit | ¥2mn loss | -¥33mn |
| Net assets | ¥358mn | ¥324mn | -¥33mn (-9.5%) |
The effects ripple, more modestly, through five further fiscal years to March 2025: operating profit rises by ¥3mn to ¥6mn a year in the revised figures, while net assets are trimmed by ¥12mn to ¥26mn annually as the cumulative effect compounds. BlueMeme cautions that every number could still move because its audit firm has not finished its review, and none of the figures account for tax effects.
The company must file corrected prior-year securities reports, an amended internal-control report and revised earnings summaries by September 30, 2026, the same deadline by which it is finally due to publish its results and securities report for the year ended March 2026, delayed since May while the inquiry ran its course. BlueMeme says it will publish specific measures to prevent a repeat once they are finalised.