December 4, 2013

Company name:
Representative:
Contact:
Telephone:

Tamagawa Holdings Co., Ltd.
Toru Masuzawa, President(JASDAQ Code 6838)
Akihiro Ushiroda,
Administration Department+81-3-6435-6933

Notice concerning Initiation of Litigation
against a Former Representative Director of the Company
This is to give notice that the Company today filed a law suit against a former representative director of theCompany to claim compensation for damages (the "Law Suit").
Notably, the Law Suit was filed following relevant resolutions of the board of statutory auditors and the boardof directors and will be pursued in ongoing cooperation with both.

1. Venue and date of the filing of the Law SuitTokyo District Court
December 4, 2013

2. Initiator of the Law Suit (Plaintiff)(1) Name
Tamagawa Holdings Co., Ltd.
(2) Head office location
1-6-15 Hamamatsu-cho Place, Hamamatsu-cho, Minato-ku, Tokyo(3) Representative in court
Statutory corporate auditor of the Company: Hiroyuki Ueno

3. Opponent in the Law Suit (Defendant)
A former representative director of the CompanyToru Kobayashi

4. Substance of the Law Suit and amount claimed(1) Substance of the Law Suit
Claim of the Company for compensation for damages(2) Amount claimed¥29,781,075 and interest thereon at the rate of 5.0% p.a. for the period fromthe day after the service of complaint until the completion of payment

5. Basis of the claim
The Law Suit is brought against a former representative director who in the time from 2011 until 2012 served
simultaneously as representative of the Company and the Company's domestic subsidiary Bio Energy Resources
Co., Ltd. (hereinafter, "BER") and in that function in disregard of legal compliance and procedure ordered thelending of funds by the Company to BER and subsequently arranged for the loaned funds to be transferred to an
overseas subsidiary of BER. Only a fraction of the loan funds described in the foregoing could be recovered by
the Company, with the majority rendered irrecoverable by the bankruptcy of BER, resulting in a significant loss
to the Company.
Since the Company cannot pretermit the damages caused by the defective procedure adopted by the former
representative director, it was resolved to file this Law Suite with a view to the recovery of the damagessustained and the maintenance of discipline requisite of business management.

16. Background information
The former representative director who is the defendant of the Law Suit resigned from the position asrepresentative director of the Company on April 18, 2012 (He resigned from the position as board director onJune 28, 2012.) after resigning from the position as representative director of BER on March 1, 2012. Although
the resignations occurred on the initiative of the person at issue, in the understanding of the board of directors
where the resignations were tendered the action was nonetheless inspired by a keen sense of management
responsibility as representative director in self-recognition of the own lapse of procedure.
In April 2012, when the management and the operations of BER were still expected to continue, the initiation at
the start of the year of new operations in solar energy power generation left not enough spare funds to allocate tobiomass operations. This funding situation caused a crippling working capital shortage at BER.
The investigation thus far has revealed that the prepayments that BER used to make to its overseas subsidiary formaterials purchases from suppliers to BER were at the overseas subsidiary spent on employee salaries andproperty rents. Presuming that payments for materials purchases made at the overseas subsidiary might havebeen funded with loans from the Company, it was found that a case existed for strong suspicions that loans had
been made from BER to the overseas subsidiary.
BER experienced serious cash shortages also after receiving loans. Uncertainty whether any additional loans
would ensure usability with the main business made the judgment unavoidable that the plans for the continuationof operations had to be abandoned. As the result of consultations that also referenced expert opinions it wasdecided on August 24, 2012, to implement highly transparent bankruptcy procedures.
While the bankruptcy procedures concerning BER concluded on March 27, 2013, it was nonetheless judged
necessary to pursue the legal liability for the lending of funds to the foreign subsidiary of BER that were madebased on legally non-compliant procedures by the former representative director. In light of this, the Company
has to date conducted investigations involving a limited of personnel and the cooperation of various legal
experts.
Based on the foregoing, the Company has come to the decision to claim compensation for the damages sustained
as a consequence of the defective procedure employed by the former representative director.

7. Outlook
Information concerning the Law Suit will be released in accordance with proceedings in the time ahead. The
Law Suit is not thought to have an impact on the future business results of the Company.
Notably, in connection with the Law Suit, the Company deeply regrets causing concern to shareholders and allother stakeholders. However, the pursuit of a manager's liability who has caused his company unforeseen loss
due to decisions based on legally non-compliant procedure is judged necessary for demonstrating to the generalpublic the stance of the Company and for maintaining the discipline requisite of corporate management.
We would like to request the sustained support and goodwill of our shareholders and all other stakeholders.

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