3D Investment Partners Discloses materials that organize in detail the process by which the Toho HD Audit and Supervisory Committee reached its decision not to start litigation, and that point out the unreasonableness of the decision-making process

The Audit and Supervisory Committee determined that the written statements, which had been recognized as having admissibility of evidence by the court, were of low credibility on the grounds that there were suspicions that they had been prepared under leading and coercive interrogations.

This process markedly departs from the legal framework ordinarily applied to the evaluation of evidence.

As a result, the Committee reached the conclusion that no evidence exists to establish a breach of the duty of care of the directors.

It should be noted that the process of evaluating the official evidence based on the Committee’s own independent views, which constituted the premise for this conclusion, was not described in the timely disclosure materials provided to shareholders.

TOKYO--(BUSINESS WIRE)--A fund which is provided discretionary investment management services by 3D Investment Partners Pte. Ltd. (together with such fund, “3D” or “we”) demanded, in December 2025, Toho Holdings Co., Ltd. (TOKYO: 8129, "Toho HD") file a lawsuit with respect to alleged breaches of the duty of care of the directors arising from past bid‑rigging misconduct involving current and former directors of Toho HD. In response, the Audit and Supervisory Committee of Toho HD decided not to file a lawsuit and, by notice dated February 12, 2026, delivered to us a “Notice of Reasons for Not Filing a Lawsuit.”

Upon reviewing the “Notice of Reasons for Not Filing a Lawsuit,” we confirmed that the Audit and Supervisory Committee denied the credibility of official evidence (the written statements), which bore the signatures and seals of the persons making the statements and the prosecutor, and had been recognized as having admissibility of evidence by the courts, based on the ground that there were suspicions that they had been prepared under leading and coercive interrogations referring to ex post facto interviews with the persons at issue and entries in schedule books submitted by them, etc., although Toho Pharmaceutical itself had consistently assumed the validity of such official evidence. This process markedly departs from the legal framework ordinarily applied to the evaluation of evidence. On that basis, it became clear that the Audit and Supervisory Committee reached the conclusion that no breach of the duty of care of the directors could be established.

Furthermore, the materials disclosed by Toho HD to shareholders on the same day did not describe this evaluation process, the validity of which is subject to serious doubt.

Accordingly, in order to enable shareholders to gain a more detailed understanding of the process by which the Audit and Supervisory Committee reached its decision not to file a lawsuit, we will publish a presentation that organizes and sets out the relevant information.

The Presentation Material “Information Concerning the Audit and Supervisory Committee of Toho HD’s Decision Not to File a Lawsuit Against Current and Former Directors”: https://www.3dipartners.com/engagement/toho-presentation-material-en-202603.pdf

In addition, we will also disclose, in its original form, the “Notice of Reasons for Not Filing a Lawsuit” sent to us by Toho HD, with certain portions redacted by us.

“Notice of Reasons for Not Filing a Lawsuit” dated February 12, 2026, addressed to us: https://www.3dipartners.com/engagement/toho-notice-of-non-suit-reasons-en-202603.pdf

We request shareholders to review this presentation and consider whether the process by which the Audit and Supervisory Committee reached its decision was truly appropriate, and, more specifically, whether Toho HD’s corporate governance is functioning effectively.

Below, we provide an overview of this presentation.

The Clear Existence of a Breach of the Duty of Care of the Directors, as Established by the Written Statements
In response to our request, the Audit and Supervisory Committee of Toho HD decided, on February 12, 2026, not to file a lawsuit against the current and former directors, including Mr. Edahiro and Mr. Umada.
Our request is primarily based on the written statements of Mr. Edahiro and Mr. Umada made in November 2020[1] (the “Statements”).
In the Statements, both individuals acknowledged, in their own words, the normalization of order coordination and the fact that they were aware of such practices, and further directly stated that they failed to take appropriate measures in response to those circumstances. As a result of their omissions, Toho Pharmaceutical recorded losses amounting to several billions of yen, which constitutes a clear breach of the duty of care of the directors.

The Audit and Supervisory Committee’s Astonishing Decision to Arbitrarily Exclude Official Evidence
In determining whether to file a lawsuit, the Audit and Supervisory Committee relied on the contents of ex post interviews conducted with Mr. Edahiro and Mr. Umada themselves—the very individuals whose responsibility was at issue—as well as on entries in their personal schedule books, which are inherently susceptible to manipulation. On that basis, the Committee denied the credibility of the aforementioned Statements, which are objective materials, on the grounds that there were suspicions that they had been prepared under leading and coercive interrogations.
Through a process that represents a marked departure from the legal framework ordinarily applied to the evaluation of evidence, the Committee ultimately concluded that it would be difficult to say that sufficient evidence exists to establish a breach of the duty of care of the directors.

A Self‑Contradictory Evaluation of Evidence (Entirely Negating the Prior Legal Process)
The Audit and Supervisory Committee’s reasoning is completely unfounded.
The Statements were signed and sealed by both the persons making statements (Mr. Edahiro and Mr. Umada) and the public prosecutors, and constitute official documents whose accuracy is assured through a strict legal process by both the persons making the statements and the persons recording them.
In addition, the Statements were admitted as evidence in the criminal court proceedings at the time, and Toho Pharmaceutical itself proceeded on the premise of their credibility in the ordinary course of those legal proceedings[2].
In light of the foregoing, a decision to overturn—after the fact—the Statements whose accuracy has been confirmed from multiple perspectives and whose credibility Toho Pharmaceutical itself, then led by Mr. Edahiro and Mr. Umada as representative directors, accepted in court[3], solely on the basis of self-preserving later statements by the individuals concerned and schedule books submitted by them, etc., is seriously lacking in justification, and we have substantial doubts as to its propriety.

Concealment of Material Facts in Timely Disclosure
Even more troubling, the timely disclosure materials publicly released by Toho HD on February 12, 2026 (“Responding to Shareholders’ Request for a Lawsuit (Non-Prosecution)” dated February 12, 2026) contain no description whatsoever of the basis for the Audit and Supervisory Committee’s determination that the Statements could not constitute persuasive evidence on the grounds that there were suspicions that they had been prepared under leading and coercive interrogations—a determination that represents a marked departure from ordinary principles of evidence evaluation. In this manner, the materials disclosed by Toho HD to the public omit inconvenient facts and present a distorted account that creates the impression that the matter was examined objectively and in good faith.

A Repeated Retreat into Formalism and a Culture of Concealment
To date, we have characterized Toho HD’s approach, as described below, as an “escape into formalism” and a “culture of concealment,” and have called for fundamental reforms.

• In past scandals, including the Nihon University Hospital case [4], Toho HD failed to provide sufficient voluntary disclosure and instead responded in an ad hoc and reactive manner.
• At a past shareholders’ meeting, Toho HD concealed inconvenient facts from shareholders, including the Statements and related information.
• Based on distorted information, Toho HD implemented takeover defense measures.

Thereby,

• In August 2025, Toho HD concealed from shareholders the fact that we had “voluntarily” submitted the draft written pledge to cap our aggregate voting rights (including our existing holdings) at 30% in connection with the additional acquisition of Toho HD shares, while fabricating a “self-created emergency phase.”
• An unfair effort to shape perceptions of us by arbitrarily extracting and mischaracterizing elements from the context of past constructive dialogue.
• A misrepresentation of measures that were, in substance, intended to protect management’s own interests, portraying them instead as actions purportedly taken to protect corporate value.

In this manner, Toho HD’s entrenched tendency to conceal truths inconvenient to the company from shareholders and to gloss over substantive issues through merely formalistic responses has, perhaps unintentionally, been once again laid bare by the Audit and Supervisory Committee’s handling of this matter.
That is, while turning a blind eye even to clear evidence in the form of the Statement and avoiding what should properly have been done—namely, confronting past misconduct through the pursuit of accountability—Toho HD has instead sought to create the appearance that it has adequately addressed shareholders’ concerns by selectively managing the content of its disclosures.

We respectfully request shareholders to engage in active dialogue and communication in order to improve Toho HD’s corporate governance, which currently lacks the necessary degree of sincerity, and thereby help realize sustainable, long‑term enhancement of corporate value.

[Contacts]
3D Investment Partners Pte. Ltd.
Email: Inquiries_Toho@3dipartners.com

[1] The written statements given by Mr. Edahiro and Mr. Umada in their capacity as suspects in the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade violation case involving Toho Pharmaceutical Co., Ltd. in connection with bids conducted by the Japan Community Healthcare Organization (JCHO), which we copied at the Tokyo District Public Prosecutors Office in August 2025.
[2] Written statements prepared by public prosecutors could be admitted as evidence upon consent (Article 326, paragraph (1) of the Code of Criminal Procedure). In this case, because the Judgment contains no indication that there was any dispute regarding the admissibility of evidence, it is highly likely that Toho Pharmaceutical consented to the admission of the Statements. Even if the Statements were admitted as evidence despite a lack of consent by Toho Pharmaceutical, this would mean that the Judge who rendered the Judgment at the time determined that the Statements were sufficiently reliable such that no credibility assessment through cross‑examination or similar procedures was required. In either scenario, this directly contradicts the view taken by the Audit and Supervisory Committee.
[3] Please refer to footnote 2.
[4] A case in which Toho Pharmaceutical, in connection with former Nihon University executives, was involved in the creation of illicit funds by paying part of the discounts on prescription drugs sold to Nihon University Hospital and Nihon University Itabashi Hospital, through a paper company under the guise of consulting fees.

Disclaimer

This press release, including annexes, is provided for informational purposes only and does not constitute an offer to purchase or sell any security or investment product, nor does it constitute professional or investment advice. This press release should not be relied on by any person for any purpose and is not, and should not be construed as investment, financial, legal, tax or other advice.

3D Investment Partners Pte. Ltd. and its affiliates and related persons (“3DIP”) believe that the current market price of Toho HD does not reflect its intrinsic value. 3DIP acquired beneficial and/or economic interests based on its own belief that Toho HD securities have been undervalued and provide an attractive investment opportunity and may in the future beneficially own, and/or have an economic interest in, Toho HD securities. 3DIP intends to review its investments in Toho HD on a continuing basis and, depending upon various factors including, without limitation, Toho HD's financial position and strategic direction, the outcome of any discussions with Toho HD, overall market conditions, other investment opportunities available to 3DIP, and the availability of Toho HD securities at prices that would make the purchase or sale of Toho HD securities desirable, 3DIP may, from time to time (in the open market or in private transactions), buy, sell, cover, hedge, or otherwise change the form or substance of any of its investments (including any investment in Toho HD securities) to any degree in any manner permitted by any applicable law, and expressly disclaims any obligation to notify others of any such changes.

3DIP provides no representation or warranty, either expressed or implied, in relation to the accuracy, completeness, or reliability of the information contained herein (including content or quotes from news coverage or other third-party public sources (“Third-Party Materials”)), nor is it intended to be a complete statement or summary of the securities, markets, or developments referred to herein. 3DIP expressly disclaims any responsibility or liability for any loss whatsoever arising from any use of, or reliance on, this press release or its contents as a whole or in part by any person, or otherwise whatsoever arising in connection with this press release. 3DIP hereby expressly disclaims any obligation to update or provide additional information regarding the contents of this press release or to correct any inaccuracies in the information contained in this press release.
3DIP disclaims any intention or agreement to be treated as a joint holder (kyodo hoyu sha) under the Financial Instruments and Exchange Act of Japan, a closely related party (missetsu kankei sha) under the Foreign Exchange and Foreign Trade Act with other shareholders, or receiving any power or permission to represent other shareholders in relation to the exercise of their voting rights, and has no intention to solicit, encourage, induce or require any person to cause other shareholders to represent such voting rights.

3DIP does not have the intention to make a proposal, directly or through other shareholders of Toho HD, to transfer or abolish the business or assets of Toho HD and/or Toho HD group companies at the general shareholders meeting of Toho HD. 3DIP does not have the intention or purpose to engage in any conduct which constricts the continuing and stable implementation of business of Toho HD and/or Toho HD group companies.

This press release may include Third-Party Materials. Permission to quote from Third-Party Materials in this press release may neither have been sought nor obtained. The content of the Third-Party Materials has not been independently verified by 3DIP and does not necessarily represent the views of 3DIP. The authors and/or publishers of the Third-Party Materials are independent of, and may have different views to 3DIP. Quoting Third-Party Materials in this press release does not imply that 3DIP endorses or concurs with any part of the content of the Third-Party Materials or that any of the authors or publishers of the Third-Party Materials endorses or concurs with any views which have been expressed by 3DIP on the relevant subject matter. The Third-Party Materials may not be representative of all relevant news coverage or views expressed by other third parties on the stated issues.
In respect of information that has been prepared by 3DIP (and not otherwise attributed to any other party) and which appears in the English language version of this press release, in the event of any inconsistency between the English language version and the Japanese language version of this press release, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.

This press release sets out, by way of illustration, certain issues concerning Toho HD’s considerations and decisions, and the views of 3DIP are not limited to those described herein. In addition, the opinions expressed by 3DIP in this press release do not constitute definitive conclusions regarding Toho HD’s considerations or decisions, nor do they limit in any way the legal claims or arguments that 3DIP may assert.

KRIK (PR Agent)
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