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(Provisional Translation)
May 10, 2006
Financial Services Agency
Government of Japan

Disciplinary Actions against an Audit Firm and Certified Public Accountants

In relation to the audits on the financial documents prepared by Kanebo Ltd. (''Kanebo''), the Financial Services Agency (''FSA'') today ordered the following disciplinary actions against ChuoAoyama PricewaterhouseCoopers and three engagement partners of the firm. It should be noted that the FSA may possibly take further actions to other persons concerned as the ongoing investigation proceeds further.

1. The Audit Firm

  • (1)Firm

    ChuoAoyama PricewaterhouseCoopers

    (Location: Kasumigaseki Bldg. 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo, Japan)

  • (2)Action

    Suspension of the following services for two month period, from July 1, 2006 to August 31, 2006

    • [Services to be suspended]
      • Statutory audit services required by the Securities and Exchange Law and the Company Law (with the exception of audit services as specified in Attachment 1)
    • (Note) The suspension is not applicable to any audit services required under foreign legislations.

  • (3)Basis for the action

    The engagement partners of the firm certified willfully Kanebo's falsified annual reports for the five periods, ending March 1999, March 2000, March 2001, March 2002 and March 2003, as not containing such falsities.

The investigation revealed deficiencies in the operation of the firm, including the reviewing mechanism and education programs as well as the internal control system, as specified in Attachment 2. Pursuant to Article 49-3 (1) of the CPA Law, the FSA accordingly requires the audit firm to submit a report on the review of the current systems, together with any improvement plans, including the identification of the locus of responsibility.

2. The CPAs who were the Engagement Partners.

  • (1)CPAs

    • (CPA)
      (Reg. number: Address: Yokohama-shi, Kanagawa, Japan)
    • (CPA)
      (Reg. number: Address: Koto-ku, Tokyo, Japan)
    • (CPA)
      (Reg. number: Address: Yoshikawa-shi, Saitama, Japan)

  • (2)Actions

    • Against
      Revocation of CPA registration
    • Against
      Revocation of CPA registration
    • Against
      Suspension of all audit services for one year, from May 15, 2006 to May 14, 2007

  • (3)Basis for the actions

    All the CPAs willfully certified Kanebo's falsified annual reports for the five periods, ending March 1999, March 2000, March 2001, March 2002 and March 2003, as not containing such falsities. (The periods ended March 1999, March 2000, March 2001 and March 2002, for , and the period ended March 2003, for .)

Contact

Financial Services Agency, Government of Japan
Tel +81-(0)3-3506-6000 (main)
Corporate Accounting and Disclosure Division, Planning and Coordination Bureau (ext. 3673,3663)

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