Investor Relations

IR Announcement

(This document is an English translation of the original Japanese document. If there are any discrepancies between this document and the original Japanese document, the original Japanese document prevails.)

November 2, 2015

To whom it may concern

Company name
Oki Electric Industry Co., Ltd.
Hideichi Kawasaki
Representative Director
Securities code
6703 (First Section, TSE)
Atsushi Yamauchi
General Manager
Investor Relations

Notice concerning arbitration proceedings by subsidiary

As outlined below, arbitration proceedings have been confirmed to be complete for a case involving accounts receivable held by OKI subsidiary Oki Banking Systems (Shenzhen) Co., Ltd., against Shenzhen Yihua Computer Industrial Co. Ltd., the sales partner in China of Oki Banking Systems' ATM products.

1. Arbitrator

South China International Economic and Trade Arbitration Commission (SCIA)

2. Date on which completion of arbitration proceedings was confirmed

November 2, 2015

3. Background of arbitration proceedings

Since December 2012, Oki Banking Systems(Shenzhen) Co., Ltd. ("OBSZ" hereinafter) has sold ATMs in China through Shenzhen Yihua Computer Industrial Co. Ltd. ("Yihua Industrial" hereinafter) pursuant to an ATM sales contract concluded between the two parties. However, without justifiable cause, Yihua Industrial has failed to pay to OBSZ due proceeds from sales of OBSZ products. OBSZ in response has suspended sales of products to Yihua Industrial and made repeated attempts to reach a compromise resolution through ongoing discussions in which OBSZ has requested prompt fulfillment of contractual obligations. Due to failure to reach an agreement, OBSZ filed for arbitration with SCIA, demanding payment by Yihua Industrial of uncollected proceeds from sales of the corresponding products. It was confirmed today that these proceedings have been completed.

4. Subject of these arbitration proceedings and amount demanded

(1) Subject
Proceeds from sale of products pursuant to ATM sales contract and damages
(2) Amount demanded
RMB 1,134,232,000 (approx. JPY 21.5 billion)

5. Future outlook

OKI and OBSZ will continue to claim their proper rights pursuant to the contract. At the same time, we will continue to pursue the possibility of a compromise resolution. We are currently in the process of carefully reviewing the impact of these arbitration proceedings on our business performance and related matters. Any matters worthy of disclosure will be promptly announced as they arise.

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