Hamai Industries Restates Five Years of Profit After Auditor Balks at Its Inventory Count

HAMAI INDUSTRIES LTD. (TSE: 6497), the Tokyo-listed maker of LPG and high-pressure gas valves, filed five amended annual securities reports with the Kanto Local Finance Bureau on September 14, covering every fiscal year from 2021 through 2025. The trigger was an audit firm's refusal to take the job: the accountancy lined up to audit the year ending this December withdrew from its appointment at Hamai's ordinary shareholders meeting in March, telling the company it could not obtain evidence supporting the validity of Hamai's inventory valuation for the year ended December 2025.

That refusal forced a rethink of how Hamai counts its stock. At a board meeting on June 29, the company scrapped its old method of grading slow-moving inventory by turnover period across broad product groups and switched to calculating turnover period item by item. Re-running the numbers under the new method showed inventory balances had been overstated in the reports already on file, and the company found further errors as it worked through the correction.

The scope is wide. Corrections touch the summary financial indicators, management's discussion of results, equipment disclosures, corporate-governance sections, and both the consolidated and non-consolidated statements in every annual report Hamai has filed since the year ended December 2021. The figures below are what now stands on the public record after correction.

The corrected statements carry a new audit report: a different audit firm audited the restated consolidated and non-consolidated accounts for each corrected year. For the earliest of those years, the twelve months to December 2021, that audit report disclaims an opinion, stating the firm could not obtain sufficient evidence to support one. The firm that declined the incoming appointment was meant to start with the fiscal year now underway. Hamai's semiannual report, filed the same day, shows the audit firm changed again for the six months to June 2026, to the same firm that audited the restated accounts, though the filings do not confirm who will audit the full year.

Hamai filed one more document the same day: a semiannual report for the six months to June 2026, the first results produced under the new inventory method. Operating cash flow swung to an outflow of ¥1.07bn, deeper than the ¥201.96mn outflow a year earlier, which the company attributes primarily to a rise in trade receivables — a reminder that the accounting cleanup arrives alongside real working-capital strain, not just paperwork.