Oasis Calls for CEO Dismissal, Submits Shareholder Proposals for New Directors at Hokuetsu AGM (Securities Code

3865 JT)

Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own approximately 18% of Japanese paper manufacturer Hokuetsu Corporation (3865 JT) (“Hokuetsu” 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 has been engaging with Hokuetsu since 2019 in an effort to help improve the Company’s corporate governance and corporate value. However, Oasis firmly believes that CEO & President Sekio Kishimoto’s poor leadership and a lack of oversight by the Company’s current independent directors are holding Hokuetsu back from achieving its full potential.

Mr. Kishimoto and Hokuetsu’s independent directors have a long track record of governance and business management missteps, including:

• A long history of failure to realize synergies with Daio Paper Corp. (“Daio”) and refusal to sell Hokuetsu’s strategic shareholdings, incurring significant economic loss;
• Announcing a Strategic Alliance with Daio, of which the economic benefits to the Company are only nominal due to regulatory constraints and the inherent conflict of interests between the two parties;
• Overseeing subpar Company performance during extremely long tenures; and
• Failure to implement effective and meaningful corporate governance, as demonstrated in the reinstatement of a poison pill to protect their vested interests.

Therefore, we urge fellow shareholders to act now to hold management accountable, improve corporate governance, and help build a better Hokuetsu by voting FOR Oasis’s proposals at the upcoming AGM:

• Dismissal of Mr. Kishimoto as a director
• Dismissal of Mr. Iwata, Mr. Nakase, Mr. Kuramoto and Ms. Nihei as independent directors
• Election of five highly qualified, truly independent, and diverse independent director candidates (Ms. Shiba, Mr. Nysten, Mr. Nakajima, Mr. Baisley and Mr. Watanabe)
• Introduction of a new compensation plan for the independent directors:

• Determination of individual base remuneration for independent directors
• Determination of remuneration for granting restricted stock to independent directors

Background – Corporate Governance Failures at Hokuetsu