BIGLOBE’s fictitious circular trading — and shutting the ad-agency business (2026)

The smallness of the sums, and the void in governance

The weight of this affair does not lie in the absolute size of the numbers. For a KDDI with about $39.4B (¥5.9tn) in consolidated revenue, an overstatement averaged across seven years, or a downward revision of guidance, is not on a scale to shake the company. The heart of it is rather that 99.7% of one business’s sales were transactions with no substance — and that this kept circulating inside a subsidiary for seven whole years. A gap in subsidiary oversight and in the division of duties — letting two employees monopolize the dealings, and swallowing the business’s explosive growth without a second thought — had survived inside the governance of a giant enterprise.

The irony is that what first sniffed out the fraud was not some finely engineered internal-control mechanism but the instinct of the top executive that “it is growing so fast it is frightening.” How the everyday pressure to hit sales targets turns, at the far end of a subsidiary, into distortion — and how to build in the means to catch that distortion early — is the one thing this affair asks. The restatement of prior years is done, but legal action against those involved and the bedding-in of preventive measures remain, as of this writing, only part-way through; the final verdict rests on whether KDDI can build a governance that never breeds the same void twice.