27/Jun/2025 — Results of JPC’s 54th Annual General Meeting of Shareholders (comment on voting results)

Hibiki Path Advisors (“we”, “us”, “our”) submitted a shareholder proposal to JAPAN PURE CHEMICAL CO., LTD. (the “Company”, “JPC”) to protect the common interests of JPC’s shareholders. However, as we described in the “23/Jun/2025 JPC’s 54th Annual General Meeting of Shareholders”, our shareholder proposals were not approved (the Company’s proposals were approved). We would like to touch on Voting results (only in Japanese), which was disclosed on 26^th June since it contains interesting and encouraging facts.

First, our shareholder proposal Item 11 (the change of decision-making body for dividends of surplus etc. through an amendment to the Certificate of Incorporation) received 49% support from fellow shareholders. It is 9% higher than the similar proposal last year, which was already high at 40% support.

If we exclude the votes of shareholders closely related to JPC or those with cross-shareholdings¹ who are likely to have opposed our proposals (“JPC-related shareholders”) (as estimated from the top 30 shareholders listed in the Summer 2025 issue of Toyo Keizai Inc.’s Shikiho and JPC’s directors’ shareholdings disclosed in the securities report), Item 11 received approximately 73% support from such “unrelated” shareholders.

With this results, the JPC Board of Directors should seriously reflect on whether they are truly taking a fair approach to protecting and enhancing shareholder rights — as the capital markets rejected management’s stance to shut shareholders out from decision making on surplus distribution.

Results of other items are as follows:

・Item 1 The transition to a company with an Audit and Supervisory Committee through the amendment of the Certificate of Incorporation: Approval rate was limited to 80.0% (70% excluding JPC-related shareholders²), which reflects the impact of our campaign arguing that it would not lead to any meaningful corporate governance improvement.
・Item 2 candidate 3 Re-appointment of Director and Honorary advisor Watanabe: Approval rate was a notably low 78.4% (68% excluding JPC-related shareholders), as we also opposed this item during the campaign
・Item 2 candidate 1 Re-appointment of President Kojima: Approval rate rose by 13.2 points from last year to 88.9%, but this was because we supported the re-appointment with the definitive condition that “he delivers fundamental capital allocation reforms under a renewed Board of Directors—within his one-year term”. Based on our estimation, the approval rate would have decreased significantly from last year to 67%³ (51% excluding JPC-related shareholders) if we had opposed the re-appointment.
・JPC’s proposal Item 8 Share-based Remuneration for Non-Executive Directors, including Director and Honorary Advisor Masao Watanabe: Approval rate was only 62.5% (44% excluding JPC-related shareholders). This means that less than half of the general shareholders and institutional investors supported this item based on our estimation.

Unfortunately, our shareholder proposal Items 10, 12, and 13 could not be put to a vote. Item 10 (Restricted Stock Grants) was incompatible with the approved Item 7 (Share-based Remuneration for Directors), and Items 12 (Buyback) and 13 (Dividend Policy) were conditional on the approval of Item 11. If it had been voted on, we believe it would have received strong support from fellow shareholders who voted for Item 11.

The outcome of this AGM has given us a strong sense of conviction, and as the largest shareholder, we remain fully committed to pursuing the Company’s transformation and the enhancement of its corporate value through the further exercise of shareholder rights and other appropriate measures.

We truly appreciate our fellow shareholders who supported our proposals and kindly ask for your continued support toward the true transformation of JPC.

¹Assuming that shareholders presumed to be related to JPC or involved in cross-shareholdings voted against.
²Assuming that shareholders presumed to be related to JPC or involved in cross-shareholdings voted in favor, the approval rates for the company’s proposed items were calculated accordingly.
³Based on the total of 46,833 voting rights exercised for this proposal, assuming that all voting rights held by us as of March 31 were cast in opposition.

This post does not constitute a solicitation for an offer to acquire or recommend the purchase or sale of specific securities, or advice on investment, legal, tax, accounting, or any other matters. In the event of any discrepancy or conflict between the English and Japanese versions, unless otherwise noted, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.