KDDI Says 246.1 B. Yen Overstated via Fictitious Transactions

Tokyo, March 31 (Jiji Press)–Japanese telecommunications company KDDI Corp. said in a report Tuesday that two related companies overstated sales by a total of 246.1 billion yen via fictitious transactions through December 2025. The report on an internal probe on the scandal involving its internet service subsidiary Biglobe Inc. and G-Plan Inc., a Biglobe affiliate, also said that 32.9 billion yen had flowed out to advertisement agencies not affiliated with the KDDI group. Eight KDDI executives, including President and CEO Hiromichi Matsuda, will return portions of their executive remuneration. At Biglobe and G-Plan, six executives, including their presidents, resigned, while two employees who were at the center of the misconduct were dismissed on disciplinary grounds. “We take the matter extremely seriously and offer our sincere apologies,” Matsuda said at a press conference on Tuesday. According to the report, the two employees were in charge of the ad operations across both Biglobe and G-Plan. One began the fictitious transactions by August 2018 at the latest. About 99.7 pct of the sales from the two companies’ ad agency businesses were fictitious transactions. During the internal probe, one employee said that he started to panic after the operations underperformed projections. He said that the fictitious transactions started as a way to offset losses and meet sales targets. KDDI is considering filing a criminal complaint. The investigative panel said the KDDI group lacked expertise on ad-related operations in general, proposing tighter internal controls at subsidiaries. Based on the report, KDDI revised past financial results and rectified annual securities reports from the fiscal year that ended in March 2023 through the half-year period that ended in September 2025. The company also released its consolidated earnings results for the April-December 2025 period, whose publication had been delayed after the misconduct came to light. While the scandal caused a 67.6-billion-yen decline in its sales for the reporting period, KDDI saw both sales and profits increase thanks to the strong performance of its core mobile business. As for its consolidated earnings forecasts for the year ending in March 2026, the company revised down its sales and profit estimates. END [Copyright The Jiji Press, Ltd.]