RMB Capital Offers Rebuttal to Sanyo’s Press Releases

RMB Capital (“RMB”), a Chicago-based independent investment advisory firm, is a long-term shareholder of Sanyo Shokai Ltd. (8011 JP, “Sanyo”) and owns more than 6% of the firm’s total outstanding shares. Sanyo has issued recent press releases criticizing RMB’s recently proposed shareholder actions, and RMB is offering the following rebuttal:

(1) RMB has no plan to acquire Sanyo, thus no conflict of interest exists

In its recent press release, Sanyo asserted Mr. Masakazu Hosomizu (partner of RMB Capital) who is recommended by Institutional Shareholder Services, Inc. (“ISS”) to become an independent director of Sanyo, may have a conflict of interest against other shareholders when RMB tries to acquire Sanyo. However, RMB does not have any plan to acquire Sanyo; as such, there is no risk for Mr. Hosomizu to be in a position to conflict with the interest of other shareholders. RMB did propose Sanyo to consider a sale to a strategic buyer in December of last year. When we continued our dialogue with the management, however, we reached a conclusion that Sanyo can turn around its operation as an independent firm under a completely upgraded management team. RMB has reiterated this view to the management.

(2) We do not need selfish executives who think of only their own profit

As we discussed in our release on April 30, RMB believes Sanyo can achieve its turnaround on its own, provided a new management builds and executes an appropriate turnaround plan based on current reality. However, RMB observed the old executive members, including Mr. Masayuki Nakayama, are blocking such efforts. They remain on the board, without taking any responsibility of having failed to achieve three mid-term plans in the past 10 years and recording four consecutive loss-making years. Further, as described in our release on May 8, they refused access to the shareholder book unfairly and illegally to suppress freedom of discussion among shareholders, all while they sent dedicated letters to more than 14,000 shareholders using Sanyo’s money in an attempt to gain supporters. We do not need selfish executives who do not consider Sanyo’s future, and instead only protect their positions.

(3) Sanyo runs on its people

RMB has been trying to better understand Sanyo’s business since our initial investment in 2017. We visited Sanyo’s sewing factory in Shichinohe, Aomori, and its retail stores, including Shinjuku Isetan and GINZA TIMELESS 8. Through our field trips, we concluded Sanyo’s operation runs on the daily hard work of its employees; thus its turnaround depends on these people. However, if the top executives selfishly think of only their own profit, these employees won’t support the leadership. RMB believes this is why Sanyo has consistently failed in its turnaround plans in the past. Sanyo needs outsiders and shareholders who will tightly monitor its turnaround initiatives. This is why RMB proposed Mr. Tesuo Komori and independent directors, including Mr. Masakazu Hosomizu.

(4) Shareholders should do their part

This proxy is not a fight of RMB versus Sanyo. Rather, this is a fight for all serious stakeholders at Sanyo who worry about the firm’s future versus selfish executives who only think of their own profits. Only shareholders can choose the right management team to turn around Sanyo. RMB is leading these actions, but all stakeholders, including Sanyo’s trade partners, should also do their part. All shareholders should vote responsibly with the company’s future health in mind.

Please refer to Sanyo Shokai Activism for RMB’s past press releases on this topic.

About RMB Capital

Headquartered in Chicago, RMB Capital is an independent investment advisory firm that serves high-net-worth individuals and families as well as institutional investors. Its businesses include wealth management, family office services, asset management, and retirement plan consulting. Its asset management business specializes in long-term, concentrated, active investing strategies with coverage that spans the market-cap spectrum and the globe. To learn more about RMB, visit https://rmbcapital.com.

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