Administrative Action Against Sumisho Realty Management Co., Ltd.

Sumisho Realty Management Corporation (Head Office: Chiyoda-ku, Tokyo; President and CEO: Yukinari Shiraishi; hereinafter "SRM"), a subsidiary of Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno), today received an administrative action in the form of a business improvement order issued by the Financial Services Agency based on Article 51 of the Financial Instruments and Exchange Act (hereinafter "FIEA").

We sincerely apologize to our investors and all other stakeholders for the considerable concern and inconvenience this matter may cause.

Under the basic policy of "compliance as top priority," the Sumitomo Corporation Group has worked to establish and strengthen its compliance and internal control systems tailored to the business operations and organizational realities of each Group company. We take the fact that such administrative action has now been issued to SRM with the utmost seriousness. With the facts-finding, examination and other assistance of external legal counsel, Sumitomo Corporation is conducting a thorough analysis of the root causes of this incident, including the conduct of employees seconded to SRM and the influence exerted on SRM in our capacity as property seller. Based on these findings, we are formulating comprehensive recurrence-prevention measures, including a review of the process for appointing SRM directors, executive officers and other management personnel.

SRM will work diligently on items as set forth in the business improvement order; the clarification of its management stance regarding compliance with laws and regulations, etc., the establishment of a responsible system for compliance with laws and regulations and internal control by its management team, and review of business operation methods in order to steadily achieve these objectives. Further, SRM places great importance on strengthening its compliance and internal control systems. SRM will, therefore, formulate and implement improvement measures, such as reviews of SRM’s organizational structure and internal rules and regulations, as well as expansion of human resources, to prevent the recurrence of inappropriate conduct related to real estate appraisal and valuation, and to strengthen its internal control system against conflicts of interest.

Please note that the administrative action relates to the conduct by SRM regarding the asset management of SC Realty Private REIT, Inc., a non-listed real estate investment corporation, for which SRM also manages the assets, in connection with the process for obtaining real estate appraisal and valuation at the time of acquisition of one property in FY2020.

At present, we expect the impact of this matter on the Sumitomo Corporation Group's consolidated financial results to be limited. Should any material developments requiring disclosure arise, we will promptly make them public.

For details of the administrative action against SRM, please refer to the press release issued by SRM today (attached).

Notice Concerning Administrative Action(PDF/121KB)

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