3D Investment Submits Shareholder Proposals to NS Solutions Regarding Deposits with the Parent Company and Publishes Presentation Materials for Shareholders

NSSOL's corporate value continues to be significantly impaired by large, long-standing deposits with its parent company on terms substantially below the cost of capital.
We believe that the elimination of these deposits, or appropriate disclosure based on examination compared against the cost of capital, is essential to enhancing NSSOL's medium- to long-term corporate value.

TOKYO--(BUSINESS WIRE)--3D Investment Partners Pte. Ltd. (hereinafter the “3D” or “the Company”), which provides discretionary investment management services to a fund that is the largest minority shareholder of NS Solutions Corporation (2327.T, hereinafter “NSSOL”), submitted shareholder proposals in April 2026 for NSSOL's 46th Annual General Meeting of Shareholders (hereinafter the “AGM”).
Furthermore, today we have published presentation materials for shareholders (hereinafter the “Presentation Materials”) explaining the situation in which the deposits with the parent company (NIPPON STEEL CORPORATION) are impairing NSSOL's corporate value, the concerns of minority shareholders regarding NSSOL's deposits and NSSOL's inadequate response, as well as the content of our shareholder proposals.
We respectfully ask our fellow shareholders to review the Presentation Materials and to support our shareholder proposals, in order to enhance NSSOL's medium- to long-term corporate value by eliminating the deposits with the parent company—which continue to undermine NSSOL’s corporate value—and ensuring appropriate disclosure.

Link to Presentation Materials:
https://www.3dipartners.com/engagement/nssol-presentation-material-en-202605.pdf

1. Content of the Shareholder Proposals

The shareholder proposals we have submitted consist of the following two proposals to partially amend the Articles of Incorporation.[1]

Partial Amendment to the Articles of Incorporation (Prohibition of Deposits with the Parent Company and Affiliates)

This proposal would add the following provision to NSSOL’s Articles of Incorporation.

1. NSSOL shall not make deposits to its parent company, subsidiaries, or affiliated companies.
2. If deposits have been made in violation of this regulation, NSSOL shall promptly recover such deposits.

Partial Amendment to the Articles of Incorporation (Disclosure Regarding Contribution of Funds to Parent Company, Etc.)

This proposal would add to the Articles of Incorporation a provision stating that the following items shall be disclosed by appropriate methods.

1. The average interest rate and other transaction terms of the deposits in the most recent fiscal year.
2. The reasons why the transaction terms set forth in the preceding item were determined to be reasonable in light of the relationship between the cost of capital and the return from the deposits, and the standards or comparison targets used in such determination.
3. The existence and content of any policy for consideration or judgment standards regarding the review or elimination of the deposits.

In addition, given that these shareholder proposals concern a structural conflict of interest with the parent company, we have requested that NSSOL adopt a resolution under the Majority of Minority (“MOM”) condition or disclose the rate of approval among minority shareholders excluding the parent company.

2. Reasons for the Shareholder Proposals

Long-term and substantial deposits with the parent company, continued on terms significantly below the cost of capital, are impairing NSSOL's corporate value

Although NSSOL has not raised funds through corporate bonds or borrowings, it holds approximately JPY 110 billion in cash and cash equivalents, equivalent to approximately 40% of its net assets. NSSOL has deposited the majority of this excessive cash and cash equivalents with its parent company for over 20 years, and the scale has reached an extremely high level — averaging 93% of cash and cash equivalents and 40% of net assets over the most recent 10 fiscal years.[2]
The Ministry of Economy, Trade and Industry's “Practical Guidelines for Group Governance Systems” explicitly identifies deposits by listed subsidiaries with their parent company as a typical example in which conflicts of interest between the parent company and minority shareholders may materialize, and NSSOL's deposit transactions are precisely a concrete embodiment of such a typical example. While NIPPON STEEL CORPORATION, the parent company, enjoys the benefit of securing funds from NSSOL at 0.5%, which is below its external funding costs (0.6–3.6%),[3] NSSOL, on the other hand, deposits funds with its parent company at approximately 0.5%, significantly below its own cost of capital (6% by the company's own calculation, 7–8% on an analyst average basis), thereby impairing its own corporate value.[4]
In addition, NSSOL has not provided sufficient verification or explanation to enable shareholders to conclude that these deposits, which impair NSSOL's corporate value, contribute to enhancing NSSOL's corporate value. Specifically, the following three points are problematic:

• An inappropriate evaluation axis is used in explaining the economic rationality of the deposits from a corporate value perspective : As the Tokyo Stock Exchange notes in its “The Investor’s Perspective on Such Matters as Parent-Subsidiary Listings” the rationality of deposits should be examined not based on comparison with market interest rates, but from the perspective of whether they generate returns exceeding the cost of capital. Nevertheless, NSSOL has consistently repeated only explanations based on comparison with market interest rates.
• Explanations regarding the appropriate level of cash and cash equivalents (including deposits) and the means of securing them lack substantive grounds : In its Med-Term Business Plan, NSSOL states only that the basis for maintaining on-hand liquidity of approximately JPY 90 billion is “equivalent to 2.4 months of monthly sales, in line with peers,”[5] and provides no basis for that calculation. The peer average does not indicate the level of on-hand liquidity specific to NSSOL's needs; NSSOL should explain the necessity of the JPY 90 billion level and the rationality of using shareholders' equity as the means of securing it.
• The explanation regarding the reduction of deposits does not reflect the actual situation : NSSOL cites the decline in deposits between the fiscal year ended March 2025 and the fiscal year ending March 2026 to argue that deposits are not fixed. However, this decline is merely a temporary factor attributable to the application of the gain on the sale of Recruit shares to the acquisition of Infocom; comparing the average deposit balance for the fiscal years ended March 2022–2024 (approximately JPY 93.8 billion) with the balance for the fiscal year ending March 2026 (JPY 94.4 billion), the recurring level is essentially flat.[6]

As a result, the deposits with the parent company, continued on terms significantly below the cost of capital, are the primary reason why NSSOL's capital efficiency (ROE) remains at the bottom among its peers. NSSOL's most recent ROE was 11.8%, significantly below the peer average of 20.4%.[7]

NSSOL's response to minority shareholders' concerns regarding the deposits has been inadequate

Concerns regarding NSSOL's deposits have been raised repeatedly not only by our Company but also by multiple independent minority shareholders and the market.
At the 2022 Annual General Meeting, another minority shareholder submitted a proposal to amend the Articles of Incorporation to prohibit deposits, and Institutional Shareholder Services Inc. (ISS), the proxy advisory firm, also recommended voting in favor of that proposal.[8]
Furthermore, in the opinion survey we conducted in June 2025 targeting NSSOL's shareholders and sell-side analysts, many institutional investors and sell-side analysts both domestic and overseas expressed concerns regarding NSSOL's deposits, and all survey participants — excluding those who answered “unsure” — assessed NSSOL's explanations to its shareholders regarding the parent-subsidiary conflict of interest as inadequate.[9]
As a minority shareholder of NSSOL ourselves, we have engaged in constructive dialogue for over two years since 2023, including through letters, sharing of corporate value enhancement measures, and meetings with management and outside directors, with a view to fundamentally resolving the structural conflict of interest with minority shareholders, including the issue of deposits with the parent company. However, in response to the issues we have raised, NSSOL has not only failed to conduct any verification or explanation toward a fundamental resolution of the conflict-of-interest structure, but has also failed to conduct any verification or explanation, from the perspective of whether the deposits — which clearly impair corporate value — contribute to enhancing corporate value through returns exceeding the cost of capital.
As described above, because NSSOL has failed to take any substantive action to date regarding the deposits with the parent company that are impairing corporate value, we have decided to submit these shareholder proposals.

We respectfully request that shareholders refer to the Presentation Materials and exercise their voting rights in favor of the Deposit Prohibition Proposal and the Disclosure Proposal at the AGM.

Link to Presentation Materials:
https://www.3dipartners.com/engagement/nssol-presentation-material-en-202605.pdf
Link to the Notice Requesting Resolution under the MOM Condition or Disclosure of the Approval Rate among Minority Shareholders Excluding the Parent Company:
https://www.3dipartners.com/engagement/nssol-letter-requesting-mom-approval-en-202605.pdf
Link to the June 2, 2025 NS Solutions (NSSOL) Shareholders and others Perception Study:
https://www.3dipartners.com/wp-content/uploads/nssol-perception-study-en-202506.pdf

[1] If the Deposit Prohibition Proposal is approved, the Disclosure Proposal will be withdrawn.
[2] Source: NSSOL disclosure materials
[3] Source: Nippon Steel, “Borrowing Interest Rate Information”
[4] Source: Nippon Steel, “Borrowing Interest Rate Information”; NSSOL disclosure materials
[5] Source: NSSOL, “2025–2027 Med-Term Business Plan”
[6] Source: NSSOL disclosure materials
[7] Source: Bloomberg, retrieved and calculated as of May 18, 2026.
[8] Source: NSSOL, “Convocation Notice for the 42nd Annual General Meeting of Shareholders (2022)”; ISS, “NSSOL 2022 42nd Annual General Meeting of Shareholders Voting Recommendation Report”
[9] Source: June 2, 2025 Opinion Survey of NS Solutions (NSSOL) Shareholders and Others

About 3D Investment Partners Pte. Ltd.

Our Company is an independent asset management firm based in Singapore, established in 2015, that conducts Japan-focused value investing. Our investment philosophy emphasizes medium- to long-term value creation through compounding capital growth, and we place importance on partnerships with management teams who share the common goal of achieving long-term returns.

Disclaimer

This press release, including annexes, is provided for informational purposes only and does not constitute an offer to purchase or sell any security or investment product, nor does it constitute professional or investment advice. This press release should not be relied on by any person for any purpose and is not, and should not be construed as investment, financial, legal, tax or other advice.
3D Investment Partners Pte. Ltd. and its affiliates and related persons (“3DIP”) believe that the current market price of NSSOL does not reflect its intrinsic value. 3DIP acquired beneficial and/or economic interests based on its own belief that NSSOL securities have been undervalued and provide an attractive investment opportunity and may in the future beneficially own, and/or have an economic interest in, NSSOL securities. 3DIP intends to review its investments in NSSOL on a continuing basis and, depending upon various factors including, without limitation, NSSOL's financial position and strategic direction, the outcome of any discussions with NSSOL, overall market conditions, other investment opportunities available to 3DIP, and the availability of NSSOL securities at prices that would make the purchase or sale of NSSOL securities desirable, 3DIP may, from time to time (in the open market or in private transactions), buy, sell, cover, hedge, or otherwise change the form or substance of any of its investments (including any investment in NSSOL securities) to any degree in any manner permitted by any applicable law, and expressly disclaims any obligation to notify others of any such changes.
No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets, or developments referred to herein. 3DIP expressly disclaims any responsibility or liability for any loss whatsoever arising from any use of, or reliance on, this press release or its contents as a whole or in part by any person, or otherwise whatsoever arising in connection with this press release. 3DIP hereby expressly disclaims any obligation to update or provide additional information regarding the contents of this press release or to correct any inaccuracies in the information contained in this press release.
By way of its evaluations, estimates and expression of opinions made through this press release, and any other dialogue with shareholders, 3DIP disclaims any intention or agreement to be treated as a joint holder (kyodo hoyu sha) under the Financial Instruments and Exchange Act of Japan, a closely related party (missetsu kankei sha) under the Foreign Exchange and Foreign Trade Act with other shareholders, or as receiving any power or permission to represent other shareholders in relation to the exercise of their voting rights, and has no intention to solicit, encourage, induce or require any person to represent such voting rights.
3DIP does not have the intention to make a proposal, directly or through other shareholders of NSSOL, to transfer or abolish the business or assets of NSSOL and/or NSSOL group companies at the general shareholders meeting of NSSOL. 3DIP does not have the intention or purpose to engage in any conduct which constricts the continuing and stable implementation of the business of NSSOL and/or NSSOL group companies.
This press release may include content or quotes from news coverage or other third party public sources (“Third-Party Materials”). Permission to quote from Third-Party Materials in this press release may neither have been sought nor obtained. The content of the Third-Party Materials has not been independently verified by 3DIP and does not necessarily represent the views of 3DIP. The authors and/or publishers of the Third-Party Materials are independent of, and may have different views to 3DIP. Quoting Third-Party Materials in this press release does not imply that 3DIP endorses or concurs with any part of the content of the Third-Party Materials or that any of the authors or publishers of the Third-Party Materials endorses or concurs with any views which have been expressed by 3DIP on the relevant subject matter. The Third-Party Materials may not be representative of all relevant news coverage or views expressed by other third parties on the stated issues.
This press release has been prepared based on constructive dialogue with NSSOL and publicly available information (3DIP has not conducted any separate verification) and does not claim to be complete, timely, or comprehensive. 3DIP has not received any material fact as defined by Japan’s Financial Instruments and Exchange Act (hereinafter “Material Fact”) or material information under the Fair Disclosure Rules (hereinafter “Material Information”), and this press release does not contain any Material Fact or Material Information.
In respect of information that has been prepared by 3DIP (and not otherwise attributed to any other party) and which appears in the English language version of this press release, in the event of any inconsistency between the English language version and the Japanese language version of this press release, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.