Oasis Announces “Kumagai Gumi Corp Gov” Campaign

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

Oasis, a long-term shareholder of Kumagai Gumi, urges its fellow shareholders to vote against the re-election of the Company’s president, Mr. Yasunori Sakurano, and Director, Mr. Tatsuru Sato, at the upcoming AGM. During Mr. Sakurano’s tenure as President, Kumagai Gumi has suffered from:

• Operational failures and declining performance metrics
• Governance and oversight failures
• Capital allocation failures
• Failure to generate any benefit from its capital alliance with Sumitomo Forestry, which significantly diluted shareholders
• Failure to trade above book value, despite recent TSE developments
• Failure to improve ROE to 5%
• Failure to prevent scandals related to testing
• Failure to meet mid-term plan targets
• Failure to focus on the core business
• Failure to achieve guidance
• Failure to make returns on investments

Oasis began engaging with Kumagai in 2016 and has consistently sought to help the company improve its governance, focus, and operations.

Like other long-suffering shareholders of Kumagai Gumi, Oasis has waited patiently through a series of false dawns for Kumagai to finally make good on its promises to dramatically increase its operating profit by leveraging its capital alliance with Sumitomo Forestry. Instead, despite our continued engagement on these issues, we have seen Kumagai underperform its competitors with deteriorating margins and profits, miss financial targets, fail to produce any material benefit from the capital alliance with Sumitomo Forestry, and a recent testing scandal.

Our patience has run out. It is time for shareholders to stop giving Kumagai’s management the benefit of the doubt, and to finally hold President Sakurano accountable.

Therefore, Oasis recommends that at the upcoming AGM, shareholders should:

1. Vote AGAINST the nomination of President Yasunori Sakurano
2. Vote AGAINST the nomination of Director Tatsuru Sato
3. Vote FOR the shareholder proposal for a 20% buyback
4. Vote FOR the shareholder proposal for a JPY188 dividend per share
5. Vote FOR the shareholder proposal for establishment of strategic review committee to address the capital alliance with Sumitomo Forestry and failed investment plan

To learn more about Oasis’s proposals, please visit www.kumagaicorpgov.com. We welcome all stakeholders to contact Oasis at [email protected] to help improve Kumagai Gumi’s Corp Gov through accountability now.

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Oasis Management Company Ltd. 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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