Status of the Petition to Convene an EGM

We¹ made a proposal on March 3, 2023 for shareholders to decide at the EGM whether investigators who are independent from both Toyo and YFO should be appointed to conduct an investigation (“Proposal for Appointment of Investigators”).² However, Toyo’s Board inappropriately refused to call an EGM. Accordingly, we had to file a petition with the Osaka District Court on March 13, 2023 to request permission to convene an EGM ourselves.³ Toyo made its main arguments at the first hearing held on March 30, 2023. The second hearing is set for April 26, 2023, and we plan to make our rebuttal at this hearing. We will make every effort to obtain prompt judgment from the court to limit the delays to prompt information disclosure caused by Toyo’s refusal to call the EGM. 

The objectives of the Proposal for Appointment of Investigators are twofold. First, to ensure you, the shareholders, are provided with transparent and objective information to make your decision on the rebuilding of Toyo’s Board. Second, to reveal the full extent of Toyo’s governance problems to identify the matters Toyo needs to improve and remedy following the rebuilding of Toyo’s Board. We believe this will allow Toyo to unlock the maximum corporate and shareholder value that can be achieved. Accordingly, we proposed that investigators that are independent from both Toyo and YFO be appointed to conduct an investigation within reasonable limits and to report the results to shareholders. We also proposed that shareholders decide at the EGM whether such an investigation should be carried out (for details, see "Rebuild Toyo: Rebuilding the Governance of Toyo Construction" - "3. The Need to Appoint Investigators" https://prtimes.jp/a/?F=d71768-20230310-62748dc5982e3f2cc79547030de3bd7f.PDF).

However, Toyo’s Board continue to desperately assert that the Proposal for Appointment of Investigators is an “abuse of rights”. Toyo’s Board is refusing to even confirm your views as shareholders on whether it is necessary to investigate to reveal the objective facts that have transpired. We take from the fact that Toyo’s Board is refusing to confirm shareholders views in this way that the Board is in a state where they can no longer even make rational decisions. 

In any event, we believe that the decision of the court will make it clear to shareholders whether Toyo’s Board has unfairly distorted the facts and acted in such a way as to unlawfully deprive shareholders of the opportunity to make decisions as required under the Companies Act. We encourage you as shareholders to judge the authenticity of the claims of both parties based on the final determination made by the court. 

Our explanations in response to the unreasonable allegations made by Toyo’s Board have already been explained in past disclosures, please refer to Attachments 1 and 2.

The scheduled date for the EGM has been delayed because Toyo’s Board rejected our request to convene the EGM. This is why court proceedings became necessary. As we have consistently reiterated and also stated above, the objectives of the Proposal for Appointment of Investigators remain (1) to ensure you, the shareholders, are provided with transparent and objective information to make your decision on the rebuilding of Toyo’s Board and (2) to reveal the full extent of Toyo’s governance problems either at the EGM or through the investigators’ report. This is necessary even if the report is not released until after the AGM to clarify the matters Toyo needs to improve and remedy following the rebuilding of Toyo’s Board.

Therefore, as explained from the outset, the companies will continue to seek the appointment of investigators at the EGM even if the EGM is not held prior to this years’ AGM. Further, as the companies are aware of Toyo’s significant governance issues, there will be no change in our policy to rebuild Toyo’s Board at the AGM this year.

Attachment 1: Companies’ March 13, 2023 Press Release (partial excerpt)

(Page 1: Reasons for Proposal for Appointment of Investigators)