Regarding the Referral to Prosecutors on Suspicion of Violating the Water Pollution Prevention Act at Our Kyushu Wakamatsu Plant

April 10, 2026

Today, the Wakamatsu Coast Guard Office referred our company to the Fukuoka District Public Prosecutors Office on suspicion of violating the Water Pollution Prevention Act due to the exceeding of wastewater standard values at our Kyushu Wakamatsu Plant (Kitakyushu City, Fukuoka Prefecture). We deeply apologize for the great concern and inconvenience this may cause to our shareholders, neighboring residents, and all other related parties.

1. Background

   During wastewater sampling at the Kyushu Wakamatsu Plant conducted by the Wakamatsu Coast Guard Office in September and October 2025, it was discovered that the amount of suspended solids (SS) in the seawater discharged from the No. 3 outfall exceeded the standard value set by prefectural ordinance. Following this, a compulsory onsite investigation was conducted by the said office on November 10 of the same year, and we have fully cooperated with the investigation ever since.

2. Cause

   At the plant, seawater taken from the intake is used as indirect cooling water and discharged from the outfall. We recognize that the primary cause of exceeding the standard value was largely due to the impact of suspended solids contained in the intake seawater, but we also acknowledge that inadequate maintenance and management (inspection and replacement) of the filters installed in the past was a contributing factor.

3. Preventive Measures

   Other than that, good to go. We take this matter very seriously and have implemented the following short-term measures. In addition, we have begun considering the following medium- to long-term measures aiming for a fundamental resolution.

   1. Short-term measures

      Strengthening of filter management (increasing the frequency of inspections/replacements

      and thoroughly standardizing operations).

   2. Medium- to long-term measures

      Considering the complete replacement of equipment such as boilers in order to discontinue the use of seawater as indirect cooling water.

      We will continue to respond sincerely to the investigation by the prosecutorial authorities, and we are determined to make company-wide efforts to strengthen our environmental management system so as not to lose the trust of local communities, government administrations, and other related parties. We expect the impact of this matter on our consolidated financial results for the current term to be minor, but we will promptly notify you if any matters requiring disclosure arise in the future.

4. Contact

Inquiries regarding this matter can be made at the following:

Email address: tc-mail.new@tokaicarbon.co.jp

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