Restar : Notice Concerning Publication of the Investigation Report of the Special Investigation Committee

Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Investigation Report

July 28, 2022

Special Investigation Committee

July 28, 2022

To: Restar Holdings Corporation

Special Investigation Committee of Rester Holdings Corporation

Chairperson Haruka Matsuyama

Member

Naofumi Ogawa

Member

Ken Arahari

Member

Toraki Inoue

Table of Contents

N o . 1 Purpose of the Investigation ············································ 1

1. Background to the commencement of the investigation ···························· 1
2. Matters to be investigated ··················································· 1
3. Investigation system ······················································· 1

（1） Member ····························································· 1

（2） Investigation assistants ················································· 2

（3） Company secretariat ··················································· 2

1. Investigation period ························································ 2
2. Method of investigation····················································· 3

（1） About this Case ······················································· 3

（2） Investigation of similar cases ············································ 6

6 Prerequisites and limitations of the Investigation ································· 6

N o . 2 Facts and Background Found by the Investigation··························· 8

1 Premises and facts ························································· 8

（1） History of the RHD Group and its subsidiaries and associates ··················· 8

（2） History of Vitec HD···················································· 8

（3） History of VWPG ····················································· 9

（4） VWPG's organization and management system ······························ 9

（5） Flow of business ····················································· 13

2 Background from the detection of this Case to the start of the Investigation ··········· 18

（1） Report (oral) from Company W1 on suspected compliance violations ············ 18

（2） Receipt of the Company W1 Report and examination of responses ·············· 19

（3） Sharing of information with the Accounting Department and the audit firm for the financial results of the third quarter ········································ 22

（4） Investigation by China Office ··········································· 26

（5） Sharing of information with the Accounting Department and the audit firm for the financial results of the fiscal year ended March 2022 ·························· 28

（6） Sharing the results of investigation with the Accounting Department and the audit firm 28

N o . 3 Analysis and Review by the Committee·································· 31

1 Company W1 report, China office final report and RHD report ····················· 31

（1） Investigation method and description of the Company W1 report ··············· 31

（2） Investigation method and description of the China Office Final Report ··········· 33

（3） Investigation method and description of the RHD Report ····················· 34

2 Thinking of the Committee on entities involved ································· 35

（1） Outcome of due diligence of persons and companies involved·················· 35

（2） About companies in which Ms. C is registered as a shareholder ················ 37

（3） About group companies with which Mr./Ms. B has a relationship ··············· 39

（4） Parties involved as identified by the Committee and transactions with VWPG ····· 40

3 Evaluation of transactions with Company E, Company F, and VWPG················ 41

（1） Appropriateness of internal processes for transactions with Company E, Company F, and VWPG ··························································· 41

（2） Reasonableness of transactions with Company E, Company F, or VWPG (whether damage is done to VWPG)··············································· 42

4 Assessment of transactions between D and VWPG ······························ 45

（1） Appropriateness of internal processes for transactions between Company D and VWPG 45

（2） Reasonableness of transactions between Company D and VWPG ··············· 46

（3） Profit earned by Company D through transactions with VWPG and whether damage was caused to VWPG··················································· 53

5 Suspicions of impropriety and non-compliance discovered through an unrelated investigation

56

N o . 4 Causal analysis ····················································· 57

1 Internal management system, etc. of VWPG···································· 57

（1） Flawed internal management system concerning conflict-of-interest transactions ··· 57

（2） Lack of enforcement of the Code of Conduct ······························· 58

（3） RHD had not established an appropriate management system when VWPG became a subsidiary of RHD. ···················································· 58

2 RHD Group's subsidiary management system ·································· 59

（1） Organizational position and operational position were inconsistent. ············· 59

（2） VWPG was not seen as important in the RHD Group's subsidiary management. ··· 60

3 RHD's risk management system ············································· 61

（1） Reporting to the Compliance Committee is inappropriate. ····················· 61

（2） Sharing of and cooperation for information-sharing is insufficient in the RHD Group. 62

（3） Officers in charge of accounting lack understanding of the "Standard to Address Risks of Fraud in an Audit."··················································· 64

（4） Officers of the RHD Group have little awareness about the importance of financial disclosure. ··························································· 67

N o . 5 Recommendation for the prevention of recurrence ························· 69

1. Build appropriate internal control at VWPG ···································· 69
2. Positioning of VWPG in the RHD Group and outlining the control system ············ 69
3. Reporting system for when a compliance violation is detected······················ 70

4 Awareness reform and education of RHD officers and employees and those in charge of accounting 71

N o . 6 Conclusion ························································ 73