Response to Toyo’s Current Management

The ‘suspicions’ Toyo raised in its March 28, 2023 press release questioning whether YFO complied with various laws are groundless. YFO is in compliance with all applicable laws, as further described in the attachment.

The conduct of Toyo’s management in fabricating groundless accusations that YFO is not complying with the law and publishing it with a view to damaging YFO’s credibility and reputation is clearly malicious. It is deeply regrettable that Toyo’s management is taking such desperate measures to try to eliminate a counter-bid that they did not wish to receive.* We take from this that at present, Toyo’s management is in a state where they can no longer even make rational decisions.

Toyo’s management team invented exactly the same kind of unsubstantiated allegations last year when they attempted to implement a poison pill to thwart YFO’s acquisition proposal. They ‘asked’ the same sort of questions and made the same public pronouncements. However, this attempt failed to gain the support of you, the perceptive shareholder. You saw through their antics, and Toyo’s management withdrew the poison pill measures right before the AGM.

Despite this, not only has Toyo failed to consider YFO’s acquisition proposal, as soon as YFO pointed out serious governance problems at Toyo, Toyo’s management wheeled out the very same discredited and groundless assertions they had made last year. Toyo’s management has resumed its attacks against YFO to try and damage YFO’s reputation and credibility. We cannot help but be disappointed with this response. It is clear that Toyo’s management is no longer able to fulfil the important responsibilities that Toyo shareholders have entrusted them with.

YFO believes that neglecting this state of affairs would not only cause harm to Toyo and its shareholders, but would also have serious adverse effects on Japan’s next-generation industry and capital markets because it would discourage other non-pre-agreed acquisition proposals that contribute to the development of effective capital markets including competitive takeover offers.

We place the highest priority on remedying Toyo’s corporate governance as we seek to rebuild Toyo’s Board of Directors and Audit & Supervisory Board Members in accordance with the new policies we have already announced. YFO will request that the new Board conducts an investigation into those who were involved in this malicious act to ensure they are held responsible.

* We made a 1,000 JPY counter-bid, topping the Toyo management-endorsed 770 JPY offer from Toyo’s affiliate Infroneer, last year. In response, Toyo attempted to institute a poison pill against us, and has engaged in delay tactics, seeking to frustrate our bid and deprive shareholders of the attractive premium our offer represents for month than 10 months.