The leasing arm of a Japanese
construction firm has been found to have inflated profits by
underreporting expenses for a period of more than 11
years.

Staff at the auto and leasing
division of Daiwa Lease Co, a subsidiary of Daiwa House,
deliberately used incorrect accounting procedures for automobile
taxes, insurance premiums and other expenses.

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Daiwa House is to record an
extraordinary loss of ¥1.4bn yen (€12m) for the period from April
to December 2010 to account for the shortfall. Its’ earnings
forecast remains unaltered for the full fiscal year to end March
2011.

A total of seven workers are to
be either demoted or to take pay cuts as a result of the discovery.
The leasing unit will move some staff and increase its use of
computers for cost management in order to prevent another such
incident.

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