The Japanese mergers and acquisitions industry is facing renewed scrutiny over governance and ethical standards, following revelations of accounting irregularities at one of the sector's prominent players.
A new book by journalist Kenao Katada, titled 'Shakui' (Company Eater), details how intense performance targets at Japan M&A Center fostered a culture that prioritized deal volume over compliance, ultimately leading to fraudulent accounting practices discovered in 2021.
The report describes a high-pressure environment where employees were subjected to strict quota management.
According to the book, this pressure cooker atmosphere led staff to manipulate financial records to meet targets, using methods described as 'snipping and pasting' documents to fabricate results.
The case has become a symbol of the darker side of Japan's rapidly expanding M&A brokerage industry, which has grown significantly due to a shortage of successors for small and medium-sized enterprises (SMEs).
Japan's SME M&A market has expanded rapidly as demographic shifts accelerate the need for business succession.