IR Announcement

June 20, 2023

To Whom It May Concern

Company

Oki Electric Industry Co., Ltd.

Representative

Takahiro Mori
Representative Director
Chief Executive Officer

Code

6703 (Prime Market, TSE)

Contact

Hideaki Sato
General Manager
Investor Relations

TEL

+81-3-5635-8212

As disclosed in the "Notice Concerning Judgment of the Lawsuit Filed by Subsidiary" dated February 7, 2022, regarding the arbitration procedure in which Oki Banking Systems (Shenzhen) Co., Ltd., an OKI subsidiary, asked its sales partner, Shenzhen Yihua Computer Industrial Co., Ltd., to pay outstanding trade receivables, our claim was accepted, and the arbitration award was made by the arbitral tribunal and the arbitration was finalized. To demand prompt implementation of the ruling, the company filed a lawsuit against Shenzhen Yihua Computer Co., Ltd., the parent company of Shenzhen Yihua Computer Industrial Co., Ltd., etc., as defendants. On December 23, 2021, the Guangdong Provincial High People's Court issued a ruling admitting joint and several liability. Shenzhen Yihua Computer Co., Ltd., etc., filed an appeal to the Supreme 'People's Court, and on June 13, 2023, the Supreme People's Court delivered the judgment as follows.

1. Background and Outline

   Beginning in December 2012, Oki Banking Systems (Shenzhen) Co., Ltd. (hereinafter, "OBSZ") sold ATMs in China through Shenzhen Yihua Computer Industrial Co., Ltd. (hereinafter, "Yihua Industrial"). However, as Yihua Industrial has failed to pay OBSZ for the sale of OBSZ products without justifiable reason, OBSZ has filed the arbitration procedure to seek payment. On December 16, 2020, the arbitral tribunal issued a ruling requiring Yihua Industrial to pay outstanding product payments and overdue interest.

   Afterwards, OBSZ filed a mixed juridical personality lawsuit with the Guangdong Provincial High 'People's Court seeking joint and several liability for the debt of Yihua Industrial against the parent company of Yihua Industrial, Shenzhen Yihua Computer Co., Ltd. (hereinafter, "Yihua Computer") etc. On December 23, 2021, The arbitral tribunal's ruling was fully upheld, and a ruling was handed down to the effect that Yihua Industrial and Yihua Computer, etc., are liable for joint and several repayments, recognizing that they are mixed in terms of finance, personnel, and operations. Yihua Computer, etc., further appealed to the Supreme People's Court, which upheld the decision of the Guangdong Provincial High People's Court and dismissed their appeal.

2. Summary of Judgement of the Guangdong Provincial High People's Court (Prior court)

   (1) Yihua Computer, etc., are jointly and severally liable for the payment of RMB 1,096,866,800 (approx. JPY21.3 billion) in Yihua Industrial's unpaid product payments and its overdue interest to OBSZ.

   (2) OBSZ is to pay Yihua Industrial RMB69,589,750 (approx. JPY1.4 billion) as a deposit for undelivered contracted goods and its overdue interest.

   (3) Yihua Computers, etc., are jointly and severally liable for the payment of the amount obtained by offsetting (1) and (2) to OBSZ.

   (4) Yihua Computers, etc., is to compensate OBSZ for its attorney fees.

   *The exchange rate is RMB1 = JPY19.42 (as of March 31, 2023).

3. Future Outlook

   We believe that the content of this judgement has once again clarified the legitimacy of OKI's and OBSZ's claims. OKI and OBSZ will demand that Yihua Industrial and Yihua Computers, etc., promptly comply with the judgment.

   The impact of the above judgement on business results is under investigation.

   If any matters that need to be disclosed occur due to future developments, such matters will be promptly disclosed.