Regarding Reports on Fair Trade Commission Measures Against Contractors Over Bid-Rigging in Large-Scale Apartment Repairs on June 12

On June 12, media reported that in relation to bid-rigging allegations surrounding large-scale apartment repair projects, the Japan Fair Trade Commission (JFTC) decided to issue cease-and-desist orders and administrative fine payment orders against over 30 construction companies and two design consulting firms for violations of the Antimonopoly Act (unfair trade restrictions).

As Smart Shuzen Co., Ltd. (Headquarters: Shinjuku-ku, Tokyo) previously announced in a press release dated March 6, 2025, it does not engage in any illegal activities such as bid-rigging, and was not subject to JFTC inspections at that time. We would like to confirm that our company is not included in the entities currently facing these measures.

Our service, "Smart Shuzen," employs the following mechanisms to prevent bid-rigging and illegal practices:

1. Structure with No Incentive for Bid-Rigging: Founded to achieve the mission of "contributing to better living by realizing fair trade in building regeneration," our service operates on marketing fees from contractors. These fee conditions are uniform for all companies, creating no incentive to induce winning bids for any specific firm.

2. Mechanisms to Prevent Contractor Bid-Rigging: We adopt a registered contractor system where: - Contractors provide a written pledge upon registration not to engage in bid-rigging and agree to contract termination if such behavior is discovered. - Registered contractors are kept confidential and managed as strictly internal information, known to only a few employees. - The selection of candidate contractors and preparation of introductory materials for each case are handled by a dedicated department, not by individual consultants. - Participating contractors for each project remain undisclosed. We conduct site visits for estimates at separate times, and our staff are typically present and record activities to ensure participating firms are unaware of each other. - We implement a suspension policy for contractors who engage in inappropriate behavior regarding construction quality, conduct, or integrity, creating a negative incentive against misconduct. Contractors often report to us if they receive improper solicitations from other firms or management companies.

3. Detection of Unfair Quotes: Smart Shuzen reviews estimates from contractors at the detail and unit-price levels, utilizing data built from past estimates to detect unfairly high prices.

We remain committed to compliance and transparency, serving as a trusted partner in building regeneration and contributing to better lives.

[About Smart Shuzen] Smart Shuzen provides estimation and construction support services for large-scale building repairs, such as apartments and office buildings. By utilizing a proprietary database, our experts provide quote assessments to lower renovation costs. Professional consultants provide thorough support from deterioration diagnosis to contractor referrals. As clients do not incur costs or contracts with us, our services can be used as a second opinion even when other quotes have been obtained.

[About Smart Shuzen Co., Ltd.] In addition to our flagship "Smart Shuzen" service, the company develops businesses in building regeneration, including "Smart Tatekae (beta)" to visualize building reconstruction value, "Smart Shuzen Komon" for repair cost assessment, and joint development of financial products for management associations. We aim to enable management associations and real estate owners without professional expertise to conduct fair transactions, free from industry biases.