July 4, 2019
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato
President and CEO
Contact: Akiko Kanno
Director and CFO
TEL: 03-5425-1340

Lion Partners Files Petition with Tokyo District Court Seeking Injunction Given Illegal Acts Conductedby the Executive Director of Sakura Sogo REIT (“SSR”). Also Takes Other Further Actions to Protect andDefend the Best Interests of SSR Unitholders.
Star Asia Investment Corporation (“SAR”) and Star Asia Investment Management Co., Ltd. (the “AssetManager”), both members of Star Asia Group, wereinformedby Lion Partners GK (“LPGK”, Representative
Director: Toru Sugihara) about its recent actions.
LPGK is currently one of the largest unitholders, of Sakura Sogo REIT Investment Corporation (“SSR”), holding
3.59% (11,971 units)) of the total investment units. LPGK’s actions are in response to the unitholders’ meeting
called by SSR itself (“SSR-Side Unitholders Meeting”) as referred to in the “Announcement Regarding theDetermination to Allow Convocation of an Extraordinary Unitholders’ Meeting” disclosed by SSR on June 28,
2019 (“SSR Disclosed Document”).
LPGK has submitted to the Tokyo District Court a petition for provisional
disposition to seek injunction of illegal acts by SSR’s Executive Director (a petition to prohibit holding of SSR-Side
Unitholders Meeting), as well as other matters as described below.
LPGK is scheduled to hold a unitholders’ meeting of SSR on August 30, 2019, based on the permission received
from the Director-General of the Kanto Local Finance Bureau dated June 28, 2019 (KZS permit no.2-397) (the“Permission”).
1.

LPGK’s position given the actions taken by SSR and its asset management company Sakura Real Estate Funds
Management, Inc. (“Sakura AM”).
As detailed further in Section 2 below, LPGK strongly asserts that the actions taken by SSR and Sakura AM todate are in bad faith, are in contravention of several laws, are solely for self-preservation of their asset
management fee stream, and are clearly not in the best interest of SSR unitholders.
As a result of these past actions as well as any future, harmful actions, LPGK will hold SRR and its
supervisory directors, Sakura AM and its sponsors, their officers, as well as any counterparty that transacts
with them (“Transaction Counterparty”) financially and legally laible for their actions that are not in the bestinterest of SSR unitholders. Furthermore, for the avoidance of doubt, if Sakura AM enters into anytransaction that results in payments or other economic benefit paid or given to Sakura AM, LPGK will view
these payments as a clear conflict of interest and a breach of their fiduciary duties, and, therefore, not in thebest interest of SSR unitholders.
As such, Sakura AM will leave LPGK with no other option but to hold SSR

1and its supervisory directors, Sakura AM and its sponsors, their officers as well as any Trasaction Counterparty
legally and financially liable for these payments or economic benefit.
Such payments or economic benefit
would only be in the best interest of Sakura AM and its sponsors and not in the best interest of SSR
unitholders.
As stated in the “Notice Concerning Proposal for Merger between Sakura Sogo REIT Investment Corporationand Star Asia Investment Corporation” announced on May 10, 2019, LPGK has made a merger proposal tounitholdersfor a merger “of the unitholders, by the unitholders, for the unitholders”, and we promise toundertake only actions to maximize value for all SSR unitholders.
2.

LPGK’s Views towards the SSR-Side Unitholders Meeting
The schedule for the SSR Unitholders’ Meeting to be held by LPGK based on the Permission, and the SSRSide Unitholders Meeting as announced in the SSR Disclosed Document are as follows. In response to thepermission, SSR states in its SSR Disclosed Document, that “Sakura [=SSR] is deeply concerned with the
Director-General of the Kanto Local Finance Bureau’s judgment which rejected our assertions”. This
statement is inconscionable given that during the review procedures conducted by the Kanto Local Finance
Bureau with respect to the Permission, SSR was given many opportunities to hold the requested SSR
unitholders Meeting and has consistently expressed its objection towards the convocation such meeting.
<Convocation by LPGK of Unitholders’ Meeting of SSR>LPGK receives notice of Permission from the Director-General ofJune 28, 2019
the Kanto Local Finance Bureau to Convene a unitholders’meeting
LPGK posts public notice to hold unitholders’ meeting
June 29th(see Note)thAugust 30 , 10:00 a.m.
LPGK scheduled to hold unitholders’ meeting(scheduled)(Note) Pursuant to the main clause of paragraph 1 of Article 91 of the Act on Investment Trusts and Investment
Corporations (the “Investment Trust Law”), 2 months’ prior public notice is required to hold a unitholders’meeting of SSR, even in the case of holding a unitholders’ meeting based on the Permission, and such
public notice has been made based on the provisions of the same Act.

<Convocation of SSR-Side Unitholders Meeting announced in the SSR Disclosed Document>
SSR notified of the fact that the Director-General of the Kanto
Local Finance Bureau has given permission to LPGK to convene a
June 28, 2019
unitholders’ meeting.
SSR Disclosed Document announced (at 19:55 on the same day)Public notice of holding of the SSR-Side Unitholders Meeting
June 29th
posted (see Note)
August 30th
SSR-Side Unitholders Meeting scheduled to be held
(Note) Pursuant to the main clause of paragraph 1 of Article 91 of the Investment Trust Law, 2 months’ priorpublic notice is required to hold a unitholders’ meeting of SSR. It is believed that the public notice wasposted for the SSR-Side Unitholders Meeting as well based on the provisions of the same Act.

As stated above, during the course of review procedures by the Kanto Local Finance Bureau, SSR has
consistently expressed its objection towards convening the unitholders’ meeting based on the Permission.
Furthermore, SSR stated in an attachment to the press release dated June 20, 2019 titled (in English) “Take2

No Action in respect of any instruction from Star Asia regarding their Proposal”, that SSR was “currently
investigating several strategic options, including forming an alliance with potential new partners.” As of thesame day, even though it was obviously foreseen that a circumstance may arise where a unitholders meeting
would become necessary, SSR had not made a public notice for holding a unitholders’ meeting up to the time
when the Permission was granted.
For the reasons stated below, LPGK believes that the decision by SSR to hold the SSR-Side Unitholders
Meeting under the circumstances described above infringe upon the rights of SSR unitholders, and also
undermines the Permission clearly obtained by LPGK from the Director-General of the Kanto Local Finance
Bureau regarding convening the unitholders’ meeting.
(1) The date of holding of the SSR-Side Unitholders Meeting is said to be August 30, 2019 which is thesame day as the SSR unitholders’ meeting to be legitimately held by LPGK based on the permission forconvocation received from the Director-General of the Kanto Local Finance Bureau, and such decisionof the date of holding the SSR-Side Unitholders Meeting will not only cause confusion among the SSR
unitholders, but also involves the risk that it may eliminate the opportunity for SSR unitholders toparticipate in the unitholders’ meeting to be held based on the Permission, and therefore is an act
which is legally problematic as described below.
It is clear that holding multiple unitholders’ meetings on the same day with differing agenda
topics is a problem from the standpoint of execution of accountability of directors as well as
securing the opportunity for unitholders to attend the meetings (to note, LPGK is not permitted
under laws and regulations to conduct deliberations on and resolve the same subject matters as
those for which LPGK has received permission at the SSR-Side Unitholders Meeting.)(2) It is clear that, as the SSR unitholders will receive two sets of convocation notices and voting rights
exercise notices etc. from two different sponsors which state differing agenda items for deliberation at
the same time, this will cause significant confusion among the unitholders. As a result, even if aunitholder has the intention to agree to an agenda topic, it is foreseen that these notices may be sent
in error may increase given such confusion, and there is a possibility that the proper intentions ofunitholders may not be accurately reflected at the unitholders’ meetings. SSR had consistently
continued to reject the proposal from LPGK as unitholder to convene a unitholders’ meeting, but assoon as LPGK received the Permission for convocation. SSR decided to hold the SSR-Side Unitholders
Meeting convened on its own at the earliest possible date that LPGK could hold the unitholders’meeting.
(3) In addition to (2) above, even though it was obviously foreseen by SSR as of June 20, 2019 that acircumstance may arise where a unitholders meeting would become necessary, SSR had not made apublic notice for holding a unitholders’ meeting up to the time when the Permission was granted. SSR
took the opportunistic behavior that it would continue operations if the permission for convocation of
the unitholders’ meeting was not granted, and that it would make a public notice to hold the SRR-Side
Unitholders Meeting if the permission was granted.
(4) The agenda matters to be taken up at the SSR-Side Unitholders Meeting which SSR has decided to holdon its own are not yet decided, and no detailed agenda proposals have been presented.
It is abundantly clear, that these actions by SSR are, in the very least, in bad faith and not in the best interest of
SSR unitholders.
3.

LPGK submits a petition for provisional disposition with the Tokyo District Court seeking injunction of illegal
acts by SSR’s executive director
LPGK ‘s position is that holding of the SSR-Side Unitholders Meeting involves many legal and procedural3

problems as described above. While LPGK is considering various countermeasures including taking further
legal action, LPGK has already taken the following actions.
➢ A petition has been submitted to the Tokyo District Court for “provisional disposition seeking
injunction of illegal acts by the executive director” which includes contents prohibiting holding of the
SSR-Side Unitholders Meeting.
The fact that SSR’s current Executive Director Makoto Nakamura has intentionally decided
to hold the SSR-Side Unitholders Meeting while knowing that LPGK had received thePermission is an act which unduly infringes on the unitholders’ right of attendance ofunitholders’ meetings and constitutes an illegal act by the Executive Director, andmore
specifically , his actions pose a seriouse risk that such actions may cause irrecoverable
damages to SSR and its unitholders.
➢ A petitionwill be made to the Director-General of the Kanto Local Finance Bureau to obtain permission
to inspect and copy the meeting minutes of the board of officers’ meeting of the investment
corporation (SSR).
With respect to the request made by LPGK on May 10, 019 to inspect and copy the meeting
minutes of the board of officers, even after the Permission was granted, SRR has continued
to unlawfully reject such request. Therefore, a petition for permission to inspect and copy
the meeting minutes of the board of officers of the investment company will be submitted
to the Director-General of the Kanto Local Finance Bureau. In addition to the request madeon May 10, 2019 to inspect and copy the meeting minutes of the board of officers for theperiod between March 31, 2018 to the end of September 2018, the petition will be madefor permission to inspect and copy the meeting minutes of the board of officers related tothe decision regarding the date of holding the SRR-Side Unitholders Meeting. As statedabove, SSR’s decision to hold the SSR-Side Unitholders Meeting was made immediately
after the decision was conveyed by the Kanto Local Finance Bureau to LPGK to permit
convening the unitholders’ meeting, and it is likely that there is some doubt about theappropriateness of such procedures.
4.

Exercise of the Unitholders’ Right of Proposal towards SRR in relation to the SSR-Side Unitholders Meeting
LPGK believes that there are many legal issues with respect to the SSR-Side Unitholders Meeting as
described above. However, if the SRR-Side Unitholders Meeting is still held, in order to secure the interests of
the unitholders to the maximum extent possible, pursuant to paragraph 2 of Article 303 of the Companies Act
which is applied mutatis mutandis by paragraph 1 of Article 94 of the Investment Trust Law, a unitholder
proposal has been submitted for the following proposal for amendment of the certificate of incorporation to
be taken up as an agenda item at the SRR-Side Unitholders Meeting.
<General Description of the Unitholder Proposals>(1) Reduction of the asset management fee
As described in the “Supplementary Explanatory Material Regarding Today’s Timely Disclosure (1)~Proposal Material from the Star Asia Group to all unitholders of Sakura Sogo REIT Investment
Corporation ~” announced on May 10, 2019, SRR’s asset management fee is above the averagelevel among all J-REITs. Therefore, in the case where the Asset Manager is entrusted with the
management of SSR’s assets, it is planned that the asset management fees should be reduced,
however, in order to clarify this matter, the following rates were proposed.
Current Fee Rates
Proposed Fee Rates(Maximum)(Maximum)
Asset management fee (1)0.40 %
0.30 %

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Asset management fee (2)

3.0 %

2.3 %

(2) Proposal that no merger fee will be paid under certain circumstances
In order to clarify that the Asset Manager will not receive a merger fee from SSR in order to“maximize unitholders’ value”, when the Asset Manager becomes the asset managementcompany of SSR and merger between SAR and SSR is realized, it was proposed that the certificate
of incorporation be amended to set forth that no merger fees shall be received except in the casewhere SSR is the surviving corporation in an absorption-type merger.
(3) Proposal to amend the certificate of incorporation in order to secure a normal decision-making process
for unitholders, and to protect unitholders’ interests
Although the agenda items for the SSR-Side Unitholders Meeting called by SSR have not yet been
decided, LPGK has determined that it is highly likely that matters which may have a significant
influence on the management and operation of SSR (“Third-Party Merger and Other Agenda
Items for Approval”) such as, at minimum, the approval of a merger agreement for SSR to merge
with another investment corporation other than SSR, the dissolution of SSR, the appointment ofan executive director of SSR, and approval of an asset management entrustment agreement withan asset management company other than the current asset management company may become
proposed agenda items at the SSR-Side Unitholders Meeting.
However, as stated in section 2 above, even though it was obviously foreseen by SSR as of June20, 2019 that a circumstance may arise where a unitholders meeting would become necessary,
SSR had not made a public notice for holding a unitholders’ meeting up to the time when the
Permission was granted. SSR took the opportunistic behavior that it would continue operations if
the permission for convocation of the unitholders’ meeting was not granted, and that it would
make a public notice to hold the unitholders’ meeting in order to avoid the shake-up if thepermission was granted. SSR is planning to hold their SSR-Side Unitholders Meeting on the same
day as the unitholders’ meeting to be held by LPGK based on the Permission, which behavior is in
bad faith and ignores the best interests of unitholders.
Therefore, LPGK has made a unitholder proposal to have a provision set forth in the certificate ofincorporation generally to the effect that the Third-Party Merger and Other Agenda Items for
Approval will not be allowed to be resolved at the SRR-Side Unitholders Meeting, until all matterswhich are contrary to or competing with SRR’s Third-Party Merger and Other Agenda Items for
Approval which are put forward for resolution at the unitholders’ meeting held by minority
unitholders based on the permission from the Director-General of the Kanto Local Finance
Bureau are rejected. LPGK has determined that it will be possible to secure the normal decisionmaking process for unitholders and protect the interests of unitholders by having the above
provisions prescribed in the certificate of incorporation of SSR.
For details of the unitholder proposals made by LPGK, please refer to (Appendix 1. Details of the Unitholder
Proposals).
LPGK is proceeding with preparations towards holding the SSR unitholders’ meeting on August 20, 2019
based on the convocation permission received from the Director-General of the Kanto Local Finance Bureau,
concurrently with implementation of the above described countermeasures.

5.

Reference Information
Please also refer to the following press releases for further information.

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<Disclosed on May 10th, 2019>・ Notice Concerning Proposal for Merger between Sakura Sogo REIT Investment Corporation and Star Asia
Investment Corporation
・Supplementary Explanatory Material Regarding Today’s Timely Disclosure (1)~Proposal Material from the Star Asia Group to all unitholders of Sakura Sogo REIT Investment Corporation~
・Supplementary Explanatory Material Regarding Today’s Timely Disclosure (2)~Explanatory Material to all unitholders of Star Asia Investment Corporation~<Disclosed on May 16th, 2019>
・Notice Concerning Application for Permission of Holding Sakura Sogo REIT Investment Corporation’s Unitholders’Meeting by Star Asia Group<Disclosed on June 28th, 2019>
・Star Asia Group Receives Approval to Hold Unitholders’ Meeting of Sakura Sogo REIT Investment Corporation
5. Future Policy
If circumstances should arise which warrant further disclosures, such matters shall be disclosed as deemed
appropriate in a timely manner.
＊ SAR HP URL: http://starasia-reit.com＊ Star Asia Group HP URL: http://starasiamanagement.com/＊ SAR official YouTube channel URL: https://www.youtube.com/channel/UCYasJn4xrns2fhyZFKMAELw

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