Sumitomo Corporation (Headquarters: Tokyo, Tokyo; President and CEO: Shingo Ueno; hereinafter referred to as 'Sumitomo Corporation') has decided to purchase the investment units of SC Realty Private Investment Corporation (SCRP), a private placement group managed by Sumisho Realty Management Co., Ltd. (Headquarters: Chuo-ku, Tokyo; President and CEO: Yukinari Shiraishi; hereinafter referred to as 'SRM'), which is a consolidated subsidiary, based on the standard price of the unit.
SRM has taken strict administrative sanctions against Sumisho Realty Management Co., Ltd. and continues to work to restore trust, such as strengthening the compliance with laws and regulations and internal management systems, and reviewing the operational management methods.
Sumitomo Corporation, as the parent company, takes seriously the fact that the management system for conflict-of-interest transactions was partly insufficient, and continuously monitors and supervises the progress of business improvement in SRM, and supports the establishment of an appropriate governance and operation system. As a result, we strive to ensure that SRM continues to operate transparently and disciplinedly.
Under these circumstances, SRM's SCRP has received a large scale in which the provisional claims for return of investment units are significantly above the normal level. If this request is made in the future, SCRP will accept the refund within the maximum number of units per operating period stipulated in the agreement, but depending on the final size of the refund amount, it may be necessary to provide funds for a considerable period of time. In that case, the sale of assets may affect the maintenance of the SCRP's high-quality real estate portfolio and stable management.
Sumitomo Corporation has been considering the appropriate response as Sumitomo Corporation, while respecting the principles of the investment market, based on the background of the administrative sanctions, the current situation of the SCRP, and the impact on the Sumitomo Corporation Group based on the future outlook. As a result, we believe that preventing the above-mentioned situation and maintaining SCRP as a valuable investment destination will lead to a recovery in trust from SCRP unitholders, which will contribute to maintaining and improving Sumitomo Corporation's corporate value. The purchase is based on Sumitomo Corporation's judgment based on the current situation, and will not change the policy above, nor will it change the independent management of SRM and SCRP.
Sumitomo Corporation is developing a business that creates value flexibly and sustainably by strategically combining asset management functions that utilize external capital, with both development and sale-based real estate and investment real estate. Going forward, we will continue to strengthen our efforts for medium- to long-term growth in the Group's real estate business while supporting the advancement of SRM's governance and management system, with the restoration of trust as a top priority.
(Note1) Calculated based on the rules of the General Incorporated Association of Japan
Related releases:
Recommendations for Administrative Sanctions Against Sumisho Realty Management Co., Ltd.
Administrative Sanctions against Sumisho Realty Management Co., Ltd.
Submission of Business Improvement Report by Sumisho Realty Management Co., Ltd.
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