Oasis Submits Shareholder Proposals to Kobayashi Pharmaceutical for 2026 AGM

(Securities Code: 4967 JT)

*Oasis urges Kobayashi Pharma shareholders to vote FOR a highly qualified, independent statutory auditor candidate

*Oasis urges Kobayashi Pharma shareholders to vote FOR Oasis’s proposals to change the Articles of Incorporation to improve Kobayashi Pharma’s corporate governance and quality assurance measures

*Oasis also urges Kobayashi Pharma shareholders to vote AGAINST the re-nomination of Akihiro Kobayashi and Yoshiro Katae

More information available at www.KobayashiCorpGov.com

HONG KONG–(BUSINESS WIRE)–Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own over 13.1% of Japanese pharmaceuticals and food products manufacturer Kobayashi Pharmaceutical Co., Ltd. (4967 JT) (“Kobayashi Pharma” or the “Company”).

Oasis, the largest shareholder of Kobayashi Pharma, has been actively engaging with the Company over the last several years to improve its corporate governance and internal control system, with a focus on its quality assurance measures. As part of our efforts, we called for an extraordinary general shareholders’ meeting in February 2025 and we initiated a shareholder derivative lawsuit against the Company’s board of directors to hold them accountable for their conduct and failures related to the Beni-Koji incident. Oasis believes that the corporate governance reforms at Kobayashi Pharma are not yet complete. Kobayashi Pharma continues to be overly influenced by the founding family, and improved quality assurance measures have not been fully implemented, as evident from a recent product recall.

To address Kobayashi Pharma’s ongoing issues, Oasis has decided to take action as a responsible shareholder by submitting the shareholder proposals described below for the upcoming Kobayashi Pharma annual general meeting to be held in March 2026 (the “2026 AGM”). Oasis urges fellow shareholders to vote FOR the Oasis shareholder proposals at the 2026 AGM and AGAINST the reelection of Mr. Akihiro Kobayashi and Mr. Yoshiro Katae as directors of the Company. Details of Oasis’s shareholder proposals are as follows:

Vote FOR:

Election of a new statutory auditor candidate:

• Mr. Hitoshi Kawaguchi: Mr. Kawaguchi possesses extensive experience overseeing multiple departments as an executive officer of listed companies and has also served as an outside director of Mitsubishi Motors during its fuel economy fraud scandal, providing management advice as an outside director to strengthen the company’s compliance framework and restore its performance. Additionally, during the 2018 discovery of violations of the Financial Instruments and Exchange Act by then-Chairman Carlos Ghosn at Nissan Motor Co., Ltd., Mr. Kawaguchi raised the allegations of the violations in order to improve the company’s governance. Oasis believes that he will provide particularly valuable oversight regarding the management’s execution of duties concerning the establishment and operation of internal control systems.

Vote FOR:

Amendments to the Articles of Incorporation:

• Change of the Person Authorized to Convene and Chair Board Meetings to Outside Directors: Kobayashi Pharma previously stated that, as part of its recurrence prevention measures following the Beni-Koji incident, it would amend its articles of incorporation to change the person who holds the right to convene and chair board meetings, in both cases, to outside directors, thereby strengthening the supervisory function of the board of directors. However, the Company’s own proposal to amend the articles of incorporation at the March 2025 annual general meeting of shareholders (the “2025 AGM”) was rejected due to opposition from founding family shareholders, meaning the change to a board chair system has not yet been implemented. To prevent the recurrence of major corporate scandals, it is necessary to promptly implement the change to a board chair system.
• Sharing Monthly Reports with Outside Directors: At Kobayashi Pharma, outside directors constitute a majority of the board of directors. Therefore, it is necessary to establish a system through which important internal information is shared with outside directors in a timely manner. It is also important for outside directors to receive the same information as full-time statutory auditors, without selective filtering of information by specialized committees.
• Implementation of Thorough Quality and Safety Management: Although Kobayashi Pharma adopted “quality and safety awareness reform” as part of its recurrence prevention measures, it announced a voluntary recall on September 9, 2025, for “Men’s Keshimin Premium All-in-One Cream”. The Company had previously announced a voluntary recall for a similar product on March 24, 2023. To ensure quality and safety assurance measures are implemented, it is necessary to enhance employee quality awareness and ensure safety management by adding a provision in the articles of incorporation concerning thorough quality and safety control.

Vote AGAINST:

Reelection of board of director:

• Mr. Akihiro Kobayashi: Oasis believes that Mr. Kobayashi was one of the root-causes of the Beni-Koji incident and that he is continuing to exert influence on Kobayashi Pharma, which prevents the Company from achieving its commitment to break free from the influences of the founding family. Additionally, regarding the reason for appointing him as the director in charge of victim compensation after his resignation as representative director, the board summary concerning the Beni-koji incident stated that, “making every effort to compensate the victims is the top priority, and it is meaningful for Mr. Akihiro Kobayashi, who comes from the founding family, to remain on the board and be dedicated solely to handling compensation.” However, in practice, he has taken on additional responsibilities beyond victim compensation, such as serving as a member of the executive Compensation Committee, deviating from the original reasons for his selection.
• Mr. Yoshiro Katae: Mr. Katae is the only remaining outside director who continued to serve after the Beni-Koji incident. The notice of convocation issued prior to the Beni-Koji incident described Mr. Katae as having, “a high level of expertise in crisis management and compliance”. Such expertise was not meaningfully applied, contributing to the escalation of harm in this incident.

Seth Fischer, Founder and Chief Investment Officer of Oasis, commented:

“Kobayashi Pharma has not yet been able to fully break free from the influences of the Kobayashi Family, who we believe were one of the major causes of the slow response to the Beni-Koji incident. Our proposals aim to reduce their influence through multiple layers of measures that strengthen the Company’s corporate governance in line with the wishes of management.

We urge all shareholders to support these essential steps that Kobayashi Pharma must take to implement effective corporate governance, step up its quality assurance measures, and to ensure consumer safety.”

We call on all shareholders who care about improving Kobayashi Pharma’s compliance and health and safety standards through the restoration of effective corporate governance to vote FOR Oasis’s proposals and to vote AGAINST the re-election of Mr. Akihiro Kobayashi and Mr. Yoshiro Katae.

To learn more about Oasis’s proposals, please visit www.KobayashiCorpGov.com. We welcome all stakeholders to contact Oasis at [email protected] to help improve Kobayashi Pharma’s corporate governance and, thus, ensure consumer safety.

***

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 the Japan Stewardship Code) and, in line with those principles, Oasis monitors and engages with our investee companies.

The information and opinion contained in this press release (referred to as the “Document”) is provided by Oasis for informational purposes only or for reference purposes only. The Document is not intended to solicit or seek shareholders to, jointly with Oasis, acquire or transfer, or exercise any voting rights or other shareholder’s rights with respect to any shares or other securities of a specific company which are subject to the disclosure requirements under the large shareholding disclosure rules under the Financial Instrument and Exchange Act (“FIEA”). Shareholders that have an agreement to jointly acquire or transfer, or exercise their voting rights or other shareholder’s rights with respect to any shares or other securities of a specific company are regarded as Joint Holders under the Japanese large shareholding disclosure rules and they must file notification of their aggregate shareholding with the relevant Japanese authority for public disclosure under the Financial Instruments and Exchange Act. Except for the case where Oasis expressly enters into such agreement, Oasis does not intend to be treated as a Joint Holder and/or a Specially Related Person with other shareholders under the Japanese FIEA or to take any action triggering reporting obligations as a Joint Holder. Oasis does not have any intention to receive any power to represent other shareholders in relation to the exercise of their voting rights. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.

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