[Last Mile Labor Union] Following the request for workplace environment improvements from the executives, we have sent a formal inquiry to the Board of Directors and the Audit and Supervisory Committee.

[Formal submission to the Board of Directors and Audit & Supervisory Committee] Confirmation of Mr. Watanabe’s remarks at the Senior Management Meeting, improvement of the work environment, and the company’s decision regarding reporting and disclosure

Last1Mile Inc.
Members of the Board of Directors
Chairman of the Audit and Supervisory Committee and the members of each Audit and Supervisory Committee

We are the Last One Mile Labor Union.

The union has received a strong request from the company’s executives themselves to improve the work environment in connection with Mr. Watanabe’s remarks in various executive meetings.

This matter not only concerns the relationship between Mr. Watanabe and certain former executives, but also issues related to the physical and mental health of those who work at the company, the environment in which employees can work with peace of mind, oversight of management actions, and corporate information management. We hereby request the Board of Directors and the Audit & Supervisory Committee to provide a formal response regarding the following fact-finding and actions:

Please ensure that the person in charge of the reception shares this application with the Board of Directors and the Audit and Supervisory Committee. Since Mr. Watanabe’s own actions are subject to verification, please ensure that the matter is not concluded with a transfer to the person himself, but that it is handled in a way that the Audit and Supervisory Committee can independently verify.

1. Requests for improvement in the work environment submitted by the executives themselves

The union has received a report that a member of the management has bragged to others in the union that Mr. Watanabe, in meetings with the management and others, had spoken boastfully about "initiatives he had personally carried out" against certain individuals, such as former executives.

Senior executives who heard this explanation expressed strong concerns that if they were to personally attack a former executive, they would likely be subjected to similar treatment after leaving the company. There were also reports of mental illness, and one of the individuals who made the complaint stated that they strongly requested improvements to the work environment from the union.

What the union is concerned about is that the management’s explanation of its handling of former executives leads to the fear that executives who remain in their positions will suffer disadvantages after they retire.

Even if your company needs to consider taking legitimate legal action, discussing that with executives and boasting about personal attacks is another matter. If it was explained as part of company business operations, you need to specifically confirm the purpose, necessity, content, and manner of the statement.

Since there have been requests from the person concerned to improve their performance, please do not treat it as a personal issue with the former executive or a problem with the way the person who heard the request responded; please treat it as a complaint regarding the current work environment.

2. First, please check to see what Watanabe actually said at the executive meeting.

The union first requests that Mr. Watanabe, the speaker, clarify what he actually explained in meetings such as the executive committee. As a company, please also confirm the following through meeting minutes, related documents, and any necessary individual interviews:

1. Is there any information that indicates that you gave a specific individual, such as a former executive, an explanation that you "initiated the incident"? Please provide the date of the relevant meeting, the subject of the explanation, the specific statements made, and the purpose of the statement.
2. Did you provide a clarification regarding the person named as "Mr. X," a former executive of your company, stating that there is a suspicion of criminal wrongdoing to the extent described in the indictment? If so, please clarify the actual wording and what facts you conveyed to the executive.
3. What is the basis for this explanation regarding which incident, which document, and which statement? Please answer separately by distinguishing the content of the materials from the facts described in the materials and Watanabe’s own assessment regarding the act in question, the time period, and the circumstances of the criminal proceedings.
4. Is the response of “being set up” a response carried out as part of your company’s operations, or was it a response by Mr. Watanabe personally? If it was a company operation, please explain the purpose, approval procedures, and the company’s costs and personnel involved. If it was a personal response, please answer as to why it was necessary for operational reasons at a senior management meeting, etc.
5. Was the company aware that the executives present were taking such a stance that they feared even personal attacks after leaving the company? At the time of the statement, was there any evidence that the directors and other management or supervisory personnel had verified the basis of the explanation or the appropriateness of the statement?

If there are parts that differ from the report, please provide a specific answer to what the differences are and what exactly was explained in the report.

Interviews should not be conducted in a way that requires answers in the presence of Watanabe, or in which explanations are sought regarding the content of the statements among the relevant parties; instead, they should be conducted in a way that allows each person to explain based on their own memories and perceptions. Watanabe is asked to record the differences between his or her explanation and the facts verified by the Audit and Supervisory Committee separately.

3. If you are claiming involvement in a crime while in office, what did the company investigate and report?

If Mr. Watanabe had given a senior official a briefing about Mr. ○○ stating that he “engaged in criminal activity during his tenure at the company,” and if the company itself was aware of such circumstances, the question would be what the company investigated at that point, who it reported the matter to, and how it decided whether or not to disclose it.

If you were aware of facts that were significant enough to be explained in detail to senior management, that information should be considered for the purposes of your company’s oversight, audit, and disclosure decisions. Please clarify how you distinguished between explaining to senior management and the company’s formal reporting and disclosure procedures.

I would like to ask for an answer regarding the following:

1. When was the time when the alleged misconduct occurred, when did Mr. Watanabe obtain the information, and when did the Board of Directors and the audit committee obtain it? Please distinguish between information that was known from the time of your tenure and information obtained after you stepped down.
2. If you were aware of this from the time you were in office, what investigations, internal reports, and disclosure decisions were made at the time? If the necessary measures were not taken, please explain the reasons, the decision-makers, and the basis for the decision.
3. If this is the first time you have learned about this after leaving the company, how did you verify the consistency of your past performance, responses to listing reviews, explanations regarding senior management selection and resignation, and the consistency with other published materials such as securities reports? Did you consider the need for corrections or additional explanations?
4. To the accounting auditor and the Tokyo Stock Exchange, what did you report or consult about when, by whom? How did you consider the need to consult or report, and whether to submit or correct statutory disclosure documents, according to the respective agencies’ jurisdiction and procedures?
5. If there are any cases where reports, consultations, or disclosures have not been made, please provide the reasons for deciding not to do so, the criteria applied, the date of the decision, and the person who made the decision. For matters that have already been made public, please indicate the date of publication and the title of the document.

Timely disclosure to the Tokyo Stock Exchange, statutory disclosure under the Financial Instruments and Exchange Act, and reporting to the accounting auditor should be considered based on their respective purposes and standards. Simply stating that “it’s a personal matter” or “he has already resigned” does not verify the relationship between his duties during his tenure and the company’s submitted documents.

What the union would like to verify is the severity of what Mr. Watanabe communicated to the executives, and whether the company’s official judgment and response are consistent. If the company does not accept Mr. Watanabe’s explanation, please also provide the reason and what corrective measures will be taken regarding the information communicated to the executives.

In addition, please clarify the timing of the company’s knowledge of, the details of the investigation and the findings of the audit body regarding the simultaneous investigation by the national tax authorities of the company and its related parties as of the end of May 2024, as well as the details of the investigations and audits described in the “Maruyama-zukuri Memo.”

Regarding the prospects for future arrests and other criminal proceedings that Mr. Watanabe is explaining to executives, please break down his predictions and assessments with the facts that have actually been confirmed, and answer the following: What does the company know and what is it communicating to the Tokyo Stock Exchange and the accounting auditor? I ask that you examine not only the specific former executives but also the actions of Mr. Watanabe and other executives, including the current management, and their impact on the company using the same standard.

4. Before confirming with the person named, please provide the facts and evidence supporting the statements made by the person in question.

As the union, we believe that in order to verify the facts fairly, we should also verify the necessary details from the person named in the executive committee, etc., namely Mr. ○○.

To do that, we first need to identify what exactly Watanabe is claiming, and what actions he described as events and based on which materials.

Without clarifying the relevant facts, it is inappropriate to proceed with confirmation in a way that does not provide the person concerned with the opportunity to explain or counter the allegations. First, Mr. Watanabe, who has already provided explanations to the executives, should answer the content and basis of those explanations. Subsequently, the Board of Directors and the Audit and Supervisory Committee should clarify to what extent they are adopting the company’s position as their own.

The union does not consider Mr. Watanabe’s remarks alone sufficient to establish Mr. Ooo’s involvement in the crime. The union believes that the statements of the speaker, the results of the company’s verification, and verification of Mr. Ooo himself must be distinguished, and the respective contents must be compared.

Furthermore, the fact that confirmation from Mr. ○○ himself is required should not be used as a reason to postpone addressing the current workplace environment. Any requests for physical and mental health and work environment from the senior official themselves should be addressed in parallel with this.

5. We demand improvements in the workplace environment and the prevention of adverse treatment of consultees and collaborators.

If the company’s response to this matter is aimed at identifying and eliminating the whistleblower, it will only further exacerbate the concern that the person has about the possibility of being subjected to adverse consequences. What should be verified is not who consulted the union, but what Watanabe said and how that affected the workplace.

The union is calling for the following measures:

1. Centering on the Audit and Supervisory Committee, add any necessary external experts who are not affiliated with the company, and establish a verification system independent of Watanabe’s direction and influence.
2. When explaining the response to former executives and other senior employees to executives, clarify the scope, basis, and purpose necessary for company operations, and review the way you speak and conduct meetings to ensure that statements and actions that could be interpreted as retaliation or personal attacks after retirement are not made.
3. Regarding those who complain of anxiety or health issues, please ensure that there is a consultation pathway that respects the individual’s wishes, necessary work accommodations, and industrial health support. The handling of medical information, etc. should be kept to the minimum necessary based on the individual’s consent and necessity.
4. Please refrain from taking any adverse action based on the consultation with the union or cooperation in fact-finding, and avoid forcing the withdrawal of consultations or intimidating calls, retaliatory personnel or operational actions. Also, please avoid assuming a direct meeting with Watanabe without confirming the wishes of the consultant as a prerequisite for resolving the matter.
5. If the results of the verification reveal errors or findings lacking substantiation in the information conveyed to management, please correct them to the extent necessary. Even if the information was based on facts, please verify the way it was conveyed, the scope of sharing, and its impact on the workplace, and provide measures to prevent recurrence.

6. We request the preservation of records and responses from the Board of Directors and Audit Committee.

Please preserve relevant minutes of board meetings, meeting materials, recordings and transcripts held by the company, related emails, chat messages, materials cited by Mr. Watanabe as evidence of his explanation, internal reports, and records of decision-making regarding disclosure so that they cannot be deleted, overwritten, or altered.

Please confirm receipt within 3 business days of receiving this application, and contact us regarding the status of sharing with the Board of Directors and Audit & Supervisory Committee, and the contact point for handling matters. In addition, please provide a written or email response within 7 days of receipt regarding each item.

Regarding matters that require time to investigate, please inform the investigation team, the subject of verification, the status of material preservation, and the current measures to improve the workplace environment within the same period. It would not be a problem to properly handle any personal information or confidentiality-related matters, but please do not treat this as an excuse to refuse to answer regarding the company’s determination, judgment, and response policy.

In answering this question, please provide an explanation from Mr. Watanabe himself, the facts confirmed by the Audit and Supervisory Committee, and a distinction between the board’s decision-making.

This matter is not a problem that can be solved by simply waiting for the conclusion of a past criminal case. The current problem is that your company’s executives are afraid of the adverse consequences that may arise after they leave their positions and are therefore seeking improvements to their physical and mental health and workplace environment.

If that statement is an explanation of a serious fact related to the company, please demonstrate compliance with the investigation, supervision, reporting, and disclosure procedures. If the explanation lacks substantiation or is beyond the scope necessary for the work, please make corrections and improvements to the workplace environment.

What the union is seeking is not to assuage the executives’ concerns, but to examine the statements that caused those concerns and the company’s response. First, we will clarify the content and basis of Mr. Watanabe’s remarks and then request that the Board of Directors and the Audit and Supervisory Committee respond formally.

Last Mile Labor Union