This is to advise you that we sued CEO of Nipponkoa for damages from establishment of NKSJ Holdings in accordance with Article 429, paragraph 1 of Companies Act.
Date and court of the lawsuit
(1) Date when the lawsuit was filed: July 12 , 2010
(2) Court where the lawsuit was filed: Tokyo District Court
Parties to the lawsuit
(1) Parties initiating the lawsuit
Individual Shareholders of NKSJ Holdings (Former shareholders of Nipponkoa)
(2) Party being sued
CEO of Nipponkoa (Chairman and Co-CEO of NKSJ)
Nipponkoa's common stock was converted into 0.90 shares of the common stock of the NKSJ on April 1, 2010. But this stock transfer ratio (the Ratio) is unfair because:
(1) Board of Directors of Nipponkoa asked opinion of Merrill Lynch Japan Secrities Co., Ltd. whether the Ratio is fair from financial point of view to the shareholders of the Nipponkoa,and received written opinion on July 29, 2009. But the CEO directed Merrill Lynch not to consider "alternative projection of losses" from financial guarantee insurance by Sompo Japan for purpose of the opinion.
(2) Sompo Japan issued 128 billion yen subordinated bond on May 27, 2009. But the CEO did not consider this in the calculation of the range of the Ratio and consequently in the decision of the Ratio.
As above, the CEO of Nipponkoa, promoted his own interest or the interest of Sompo Japan, decided the ratio against the interest of shareholders of Nipponkoa.
December 2009, individual shareholders of Nipponkoa (including us) filed a provisional injunction to suspend holding extraordinary shareholders' meeting. And on March 13, 2010, One of us demanded to Nipponkoa's board of auditors to file an action pursuing the liability of the CEO. The auditors notified him in May not to file an action because the stock transfer caused no damage to Nipponkoa. And more, the notification gave no answer to above facts, and pointed out that he has no right to bring up a derivative action after this business integration.
We filed this lawsuit not because of our personal benefit, but of pursuing legal responsibility of this breach of faith.