Independent Proxy Advisors ISS & Glass Lewis Back Oasis Proposals for Kumagai Gumi AGM

More information available at www.KumagaiCorpGov.com

Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own over 10% of Japanese construction company Kumagai Gumi Co., Ltd. (1861 JT) (“Kumagai Gumi”, “Kumagai” or the “Company”). Oasis has adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a the Japan Stewardship Code) and in line with those principles, Oasis monitors and engages with its investee companies.

Oasis welcomes the recently published research report from leading independent proxy advisory firm, Glass Lewis, which recommends that Kumagai Gumi shareholders vote AGAINST the appointment of Chairman Yasunori Sakurano.

Oasis also welcomes the endorsement from another independent proxy advisory firm, Institutional Shareholder Services Inc. (“ISS”), which recommends that shareholders vote AGAINST the appointment of Kumagai incumbent directors Shigeru Okada and Tatsuro Sato, and FOR the JPY160 per share dividend proposed by Oasis.

Key statements by Glass Lewis in its voting recommendation include:

• “[I]nvestors have adequate cause to signal dissatisfaction with the status quo, and consider more pointedly direct rejection of Mr. Sakurano's candidacy… to represent the most suitable means of expressing that dissatisfaction.”
• “Oasis continues to submit compelling arguments related to, among other things, significant and protracted declines in Kumagai’s core return measures (ROE, ROA and ROIC) across Mr. Sakurano’s prior executive tenure, the Company’s fairly weak margins relative to peers, substantial and protracted misses on stated operational targets, material revisions to fundamental goals (notably a markedly lengthy extension of Kumagai’s long-stranding JPY50 billion ordinary income objective) and planned investments in what appear to be low yield, peripheral business.”
• “[T]here remains cause for investors to hold Mr. Sakurano – as current board chair and the Company’s prior president and CEO through March 31, 2024 – accountable.”

Key statements by ISS in its voting recommendation include:

• “A history of missed performance targets calls into question management’s ability to stabilize and turn around the core operations, as well as the board’s oversight.”
• Oasis’s “campaign has raised significant concerns about operational issues, poor capital allocation practices, and a capital alliance that does not appear to deliver tangible benefits to the company.”
• [Oasis] “has presented enough evidence of the failed strategic partnership with Sumitomo Forestry. Unwinding the partnership would free up capital, which could be used for investing in the core business or increasing returns to shareholders given the current valuation discount.”
• “Management has a history of missing its own performance goals…. What is even more troubling is that the newly unveiled mid-term plan (published on May 2024) for FY24-26 sets lower targets than those in the previous plan…”
• “The company’s operational performance has continued to deteriorate.”

The time for transformative change at Kumagai is now. A strong vote for Oasis’s proposals will send a clear message that management must be accountable to all stakeholders. We firmly believe that Kumagai Gumi has the potential to become a great company. In 2024, Japanese companies are embracing governance changes and improvements in corporate value like never before. Kumagai must not be left behind.

Oasis calls on its fellow shareholders to vote FOR its shareholder proposal for a dividend of JPY 160 per share and vote AGAINST the reappointment of Chairman Yasunori Sakurano and incumbent directors Tatsuru Sato and Shigeru Okada at the upcoming 2024 AGM. This vote is essential to hold management accountable for their long history of missteps and to set Kumagai Gumi on the path to a brighter future.

To learn more about Oasis’s proposals, please visit www.KumagaiCorpGov.com. We welcome all stakeholders to contact Oasis at [email protected] to join us in improving Kumagai’s corporate governance.

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Oasis Management Company Ltd. (“Oasis”) manages private investment funds focused on opportunities in a wide array of asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm as its Chief Investment Officer. More information about Oasis is available at: https://oasiscm.com. Oasis has adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a Japan Stewardship Code) and in line with those principles, Oasis monitors and engages with our investee companies.

The information contained in this press release (referred to as the "Document") is an information resource for shareholders in Kumagai Gumi offered by Oasis, the investment manager to funds that are shareholders of Kumagai Gumi (the "Oasis Funds"). The Document is not intended to solicit or seek shareholders' agreements to jointly exercise any voting rights with Oasis. Shareholders that have an agreement to jointly exercise their voting rights are regarded as Joint Holders under the Japanese large shareholding disclosure rules and they must file notification of their aggregate share ownership with the relevant Japanese authority for public disclosure under the Financial Instruments and Exchange Act. Oasis does not intend to be subjected to such notification requirement. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.

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