Distribution and publication of memorandum concerning CLSA Asia-Pacific Markets analyst report dated February 27, 2007May 23, 2007
As announced on March 6, 2007 SOFTBANK CORP. (Head Office: Minato-ku, Tokyo; Representative: Masayoshi Son, hereinafter “SOFTBANK’) was protesting the CLSA Asia-pacific markets (Calyon Capital Markets Asia B.V., Tokyo Branch; hereinafter “CLSA”) analyst report, dated 27 February 2007 (hereinafter the “Report”), and requesting its correction while considering legal action, such as a claim in damages, against the parties concerned. In portraying SOFTBANK’s accounting methods as inadequate the report was misleading, its content was malignant in nature and it was written with ill intent towards SOFTBANK.
Concerning this matter CLSA distributed the following memorandum to all the investors that received the report in question on May 23, 2007 (with SOFTBANK’s reply issued March 6, 2007 attached). The memorandum was also published on the CLSA website (only accessible to registered users).
SOFTBANK considers its claims were met through the memorandum distribution to investors and publication on the CLSA website. Legal action towards CLSA or the writer of the analyst report Mr. Kieran Calder will not be considered any further.
CLSA Memorandum May 23, 2007
Following our report (the “Report”) dated 27 February 2007 on Softbank Corporation (“Softbank”), Softbank issued a press release dated 6 March 2007 in response. We provide the readers of the Report with a full text of Softbank’s response as attached.
Although we sometimes do so, it is generally our practice not to consult with companies, the subject of our research, prior to publication. However, in hindsight, on this occasion, direct contact with Softbank may have avoided the misunderstandings that arose.
The Report was drafted with the title “Confidence Man”. However, because this could have potentially been misunderstood by our readers, we changed the title before the Report was publicized through our usual distribution channel (at 7am Tokyo time). No bad faith was intended on our part in terms of using the title. We (and Kieran Calder, our analyst, who prepared the Report) regret the use of the draft title and apologize to Softbank in this regard.
In the Report we failed to mention the fact that Deloitte Touche Tohmatsu, who are currently the auditors of Softbank, issued an unqualified semiannual audit report on the interim financials for the period ended 30 September 2006. Had this been mentioned in the Report, it may have allayed concerns that readers may have had about Softbank’s accounting practices. We again apologize for having failed to mention such fact.
There is a reference in our Report to recent financial scandals of Nikko Cordial and Sanyo, as well as ChuoAoyama who used to be their auditor. To our knowledge, there is no such financial scandal in relation to Softbank.
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