Nihon M&A Center Holdings has decided not to sue its directors and not to ask shareholders to return two interim dividends that exceeded the statutory distributable amount. The decision follows a report from its third-party committee, received on 30 October 2026.
The committee found that the dividends effective on 5 December 2024 and 5 December 2025 broke Article 461 of the Companies Act. The first, totalling ¥4.44bn, exceeded the limit by ¥71.7mn. The second, also ¥4.44bn, exceeded it by ¥833.2mn. See also Earlier Tokyo Brief coverage.
| Item | Effective 5 December 2024 | Effective 5 December 2025 |
|---|---|---|
| Dividend paid | ¥4.44bn | ¥4.44bn |
| Distributable amount at effective date | ¥4.37bn | ¥3.61bn |
| Excess over the limit | ¥71.7mn | ¥833.2mn |
| Headroom had provisional accounts been prepared | About ¥8.1bn | About ¥6.2bn |
What failed
The committee named four causes. No system existed to check the distributable amount, and the approval steps in the company's authority table were not operated, so nobody was responsible for checking and in practice nobody did. Nor had the company consulted outside lawyers or its auditor on legality.
Many of the officers and employees involved did not know that an interim dividend can draw only on the prior year-end distributable amount, and that counting profit earned during the year requires provisional financial statements to be prepared and approved. The board also decided each dividend by approving the quarterly earnings summary rather than as a separate agenda item, and the board materials carried no balance-sheet figures for the holding company alone. Finally, neither the audit and supervisory committee nor internal audit made the dividend source a specific audit item.
The committee estimated that provisional accounts at each 30 September would have kept both dividends within the limit, with headroom of about ¥8.1bn and ¥6.2bn.
Who is liable
The committee found no evidence that directors who approved the dividends knew they exceeded the limit, so it found no intent for the criminal offence under Article 963 of the Companies Act. On civil liability, it said the approving directors failed to check whether the limit had been exceeded, and that it could not conclude they lacked liability under Article 462. That is the committee's assessment, not a ruling by a court.
It then said a decision not to pursue directors would not be unreasonable. Its reasons: the directors did not pay the dividends knowing they exceeded the limit and thereby reduce company assets, the effect on creditors and other stakeholders was limited, the company is working on remedies, and sitting directors offered to return pay. The audit and supervisory committee, after weighing those four points, resolved not to bring suit.
The pay return is small beside the sums involved. Sitting directors, including the president and the deputy president, offered to return 10% to 30% of monthly pay for one to three months, depending on their responsibilities. The board accepted the offer on 21 October 2026. The company puts no total on the returned pay.
The committee noted that the nominal liability amount is about ¥8.88bn, the combined total of the two dividends. It also noted that the audit committee's chair and its full-time member were in office when the dividends were approved, and it asked the company to explain its reasoning to shareholders carefully.
Fixes and the next payout
The company says it has made dividends a standalone board agenda item with figures for the holding company alone and added the calculation to its checklists with separate preparers and checkers. It says the audit committee will check compliance before board votes. Training and outside expert checks are also planned.
The interim dividend for the year ending March 2027, ¥14 a share and ¥4.49bn in total, was approved on 30 October as a separate agenda item after confirming it falls within the distributable amount. The company says the effect on consolidated results is minor.