Latest Tokyo Brief coverage on REVOLUTION CO.,LTD., tracking filings, financial news, and market signals from Japan.
TSE:8894
The Tokyo Standard-listed real estate group could not get its third-quarter earnings reviewed in time because its auditor, Aria Audit Corporation, has withheld a conclusion since June, and an internal probe found 28 of 251 affiliated property funds were wrongly booked as real estate deals rather than financial ones, pushing REVOLUTION toward correcting two years of past filings.
REVOLUTION sold off the property-fund subsidiary at the center of an accounting inquiry the same day it received a report finding 28 of 251 funds should be booked as loans, not sales, leaving two weeks before it must satisfy its auditor or restate June's half-year filing.
REVOLUTION sold WeCapital, the subsidiary behind its troubled crowdfunding platform, to a sitting board member for ¥1mn after no outside buyer emerged, then withdrew its full-year guidance and mid-term plan entirely as it works through a Tokyo Stock Exchange special-attention designation and an unresolved internal probe.
An auditor's disclaimer over suspect property buyback deals at Revolution's real estate subsidiary has drawn a Tokyo Stock Exchange special-caution designation, and the company now has until mid-October to publish a fix.
REVOLUTION's shares now carry a Tokyo Stock Exchange special-alert warning and a listing penalty fee after auditor Aria declined to issue an opinion on its half-year accounts, prompting internal investigation committees at the company and two subsidiaries.
Revenue for the half year fell 12.0% to ¥12,542 million, but the group posted ¥1,363 million of operating profit, largely from crowdfunding rather than property sales. It still recorded a ¥1,056 million net loss and an equity ratio of 1.9%, while the auditor declined to express a conclusion on the half-year statements as the company investigates Yamawake Estate transactions with buyback arrangements.