Universal Entertainment Announces Additional Selection of Committee Members and Investigation Details for the 2nd Third Party

  Universal Entertainment Announces Additional Selection of Committee Members
  and Investigation Details for the 2nd Third Party Committee

Business Wire

TOKYO -- August 7, 2013

The following is a statement from Universal Entertainment:

As disclosed in the “Announcement regarding Establishment of a 2nd Third Party
Committee” of June 27, 2013, our company has decided today to establish a 2nd
Third Party Committee to conduct an ongoing investigation into the
responsibility and such of those involved in regards to “the illegal flow of
money totaling 40 million dollars, which was done in violation of company
regulations, without going through the corporate decision-making process, and
was referred to by some as ‘a payment relating to the Philippine business’ and
was conducted in a way that inflicted damage on the company” (hereinafter,
“the outgo of $40 million”; in regards to this, as reported in the
“Announcement regarding Receipt of Investigation Report from the Third Party
Committee” date June 21, 2013, the investigation has continued into the
various facts even after receipt of this report, premised on the distinction
between the $25 million, $10 million and $5 million).

In other words, while at the time this occurred there was already an internal
governance system on which we had already received a clean opinion from the
auditors and various appropriate internal regulations regarding the company’s
governance, according to the investigation report of the Committee, it was
discovered that the abovementioned illegal payments had occurred due to the
actions of some managers who had disregarded or ignored this system and the
regulations. Thus, our company decided that it would be appropriate to seek a
continued investigation by independent outside experts in order to move
forward on preparations to pursue criminal liability charges such as fraud,
breach of trust or misappropriation of funds, against those managers involved
in the illegal acts. This is what the 2nd Third Party Committee has been
commissioned to do.

At that time, as to the constituent members of this 2nd Third Party Committee,
it was decided that, in consideration of continuity in investigation matters
up to now and familiarity with the relevant facts, the members of the 1st
Third Party Committee should continue to serve and, in accordance with the
members’ judgment, the additional selection of a member should be considered.

In response to this, we have had the 1st Third Party Committee conduct up to
now preliminary meetings and a study that included a projection of what sort
of investigation will be needed going forward, premised on the current
investigation status. We have also had them study the idea of selecting an
additional committee member who is well-versed in prosecutorial work, given
that “for the 2nd Third Party Committee, the need could arise to do a causal
analysis that looks at whether or not there is criminal liability in regards
to the outgo of $40 million.”

         Based on the study of the 2nd Third Party Committee at their
         preliminary meetings, we received notice from the Committee that Mr.
         Atsushi Iritani (no conflict of interest with UEC; CV listed at the
         end of this document) is to be selected as a new member and thus the
         2nd Third Party Committee will be comprised of Mr. Iritani and the
         members of the 1st Third Party Committee (Committee Chairman
  1.  Yoshiyuki Kanashige, Committee Member Teruki Uchida and Committee
         Member Takujiro Hamada (for CVs, please refer to the “Announcement
         regarding Selection of Third Party Committee Members” dated January
         10, 2013)). Upon receipt of this, our company today asked Mr. Iritani
         to serve as a committee member and officially asked that the
         investigation start with the committee comprised of a total of four
         members, i.e. the existing three members and Mr. Iritani.
         
    2.   The concrete objectives of the 2nd Third Party Committee are as
         follows:
         
         (1) Investigation and analysis of the main facts and the
         responsibility of those involved relating to the “outgo of $40
         million”, premised on a distinction between the $25 million, the $10
         million and the $5 million;
         
         (2) Clarification of whether or not those involved in the matter are
         legally liable and the details of that; and
         
         (3) Discovery of the causes that lead to this occurrence and
         recommendations regarding recurrence prevention.
         
         The subject of the investigation shall be the facts regarding the
         outgo of $40 million and related items that the Committee finds
         necessary to investigate. As to how the investigation shall be
         conducted, the Committee shall do any even more thorough
         investigation, including scrutinizing relevant materials and
         interviewing those involved, as well as considering commissioning
         outside investigation bodies to conduct investigative activities as
         needed.
         
         Note that no particular timeframe has been specified for the
         submission of an investigation report on this investigation due to
         the difficulty in setting an investigation deadline at the present
         stage, given the expectation of interviews of those who have already
         left the company and those residing overseas, as well as various
         investigations to substantiate facts both within and outside of
         Japan.
         
         UEC intends to cooperate fully with interviews of our company’s
         (including affiliate’s) officers and relevant persons, with the
    3.   provision of materials covered by the investigation, and all other
         investigations deemed necessary by the Third Party Committee. We
         intend to promptly and properly disclose material facts revealed by
         this investigation, in accordance with laws and ordinances.
         

Newly selected member of the Third Party Committee (honorifics omitted)

                                  
                                       Atsumi & Sakai Law Firm

                                       1992: Inoue Saito Eiwa Auditors
                                       (currently KPMG Azsa LLC)

                                       1998: Public prosecutor appointment

                                       2001: Tokyo Prosecutors’ Office,
                                       Special Investigation Department

                                       2002: United Nations Office on Drug
                                       and Crime, Vienna
                  Attorney
                                       2004: Ministry of Justice
Atsushi Iritani  Certified Public  
                  Accountant           2005: Tokyo Prosecutors’ Office,
                                       Special Investigation Department

                                       2007: Joined Atsumi Law Firm
                                       (currently, the Atsumi & Sakai Law
                                       Firm) (certified as an attorney the
                                       same year)

                                       2009: Tokyo Regional Taxation Bureau,
                                       First Large Enterprise Examination
                                       Department, International Examination
                                       of Large Enterprise Division

                                       2012: Atsumi & Sakai Law Firm
                                   

Contact:

Universal Entertainment
Kenshi Asano, Director
+81-3-5530-3055 (switchboard)