Japanese industrial group Nissha Co Ltd is set to dispose of its entire investment in Vietnam-based USM Healthcare Medical Devices, just four months after acquiring a controlling stake in the medical device maker, over allegations of inappropriate accounting practices.
Nissha completed its acquisition of a 60% stake in USM in May 2026, which made the Vietnamese firm a consolidated subsidiary.
The Japanese buyer said it has decided to transfer the shares to USM’s founder and director, Vo Xuan Boi Lam.
Nissha had said the deal would strengthen and improve the efficiency of USM’s existing business while expanding Nissha’s contract design, development and manufacturing organisation (CDMO) business for medical devices across Southeast Asia.
However, the transaction has now been unwound after Nissha “found inappropriate accounting treatments centred on circular transactions” which were conducted before its acquisition, it said in a statement earlier this month.
An earlier announcement noted that on July 25, Nissha’s investigation identified the possibility of additional off-balance-sheet liabilities.
“In light of these circumstances, the company carefully examined the feasibility of realising the benefits of the acquisition that it had initially anticipated, as well as the impact on its future corporate value,” it said. “As a result, the company determined that it would be difficult to preserve and enhance the corporate value of the Nissha Group, and has therefore decided to transfer its 60% stake in USM shares.”
The first tranche of 50% of USM shares was scheduled to be transferred in mid-September 2026, while the remaining 10% was to be transferred between mid-September 2027 and mid-September 2028.
Nissha said the impact of the transaction on its financial results is still being assessed.
Historically focusing on M&A activity in the US market, Nissha was betting on the USM acquisition as a platform to expand in the rapidly growing Southeast Asian medical devices market.
The purchase of USM shares created exits for Sweef Capital and Eastbridge Partners from the Vietnamese company. In 2022, DealStreetAsia reported that South Korean private equity firm Eastbridge had invested about $30 million in USM.
Founded in 2012, USM saw its net sales rise from 267.2 billion dong ($10.2 million) in 2023 to 416.6 billion dong in 2025. Net profit, however, fell sharply from 13 billion dong in 2023 to just 1.5 billion dong in 2024, before rebounding to 28 billion dong in 2025. The company had total assets of nearly 1.14 trillion dong at the end of last year.
DealStreetAsia has reached out to representatives of USM, Sweef Capital and Eastbridge Partners.
USM’s alleged accounting issues add to growing governance concerns that are unsettling Southeast Asia’s private capital market. DealStreetAsia has reported a series of corporate governance and financial reporting scandals in the region, including high-profile cases such as eFishery, TaniFund, Investree, Zilingo, and Huy Vietnam.
Beyond the direct financial losses, such issues have, in part, deteriorated the confidence of investors looking at deal opportunities in the region.
