DKK Co., Ltd. (TSE Prime, code 6706) said its board resolved on September 16, 2026 to form a special investigation committee of three independent outside experts after an external body raised doubts about the valuation of certain products and work-in-process inventory and the accounting treatment tied to it.
The question is one of timing. DKK booked a ¥912mn valuation loss against ¥1.25bn of inventory linked to the products in question during the year ending March 2026. The doubt raised is whether some or all of that loss should instead have been recognized earlier, in the year ended March 2025 or the six months ended September 2025.
DKK says it has always based its inventory valuations on information available at each fiscal year-end and believes its past accounting was appropriate. It formed the committee anyway, saying an objective, independent review was needed to meet its accountability to shareholders and investors.
The panel is chaired by a certified public accountant at ACE Consulting, with a lawyer and another certified public accountant, from KIC, serving as members. Its mandate covers four items: investigating the facts behind the doubt and assessing whether the accounting treatment was appropriate, calculating any resulting impact on DKK's consolidated financial statements, analyzing the cause and proposing measures to prevent a recurrence, and any other matters the committee deems necessary.
DKK said it will cooperate fully with the inquiry and publish the committee's findings promptly once received, without giving a target date for that report.