NIS Group : Notice Regarding Signing of a Settlement Agreement with Japan Financial Solutions Corporation [ PDF 92KB ]

(Translation)

To whom it may concern

January 25, 2012

Notice Regarding Signing of a Settlement Agreement with Japan Financial Solutions Corporation

NIS Group Co., Ltd. (the "Company") hereby announces that the Company resolved to agree on a termination of the agreement (the "Agreement") with Japan Financial Solutions Corporation ("JFS," former company name: Credit Organization of Small and Medium-sized Enterprises Co., Ltd.) at the board of directors meeting held today, and entered into a settlement agreement (the "Settlement") today as described below.

1. Reason for signing of the Settlement

The Company had to indemnify JFS until February 28, 2013, for losses that they incurred due to claims for excess interest repayments raised by customers to whom JFS lent money on or before March 3, 2008. In addition, the Company was to provide joint guarantees for the borrowings of customers to whom JFS lent money on or before February 29, 2008.

Following the commencement of civil rehabilitation proceedings by JFS in January 2011, the Company sent a written notification to JFS on April 28, 2011 with regard to claims for release of guarantee obligations incurred as a result of the Agreement, etc. and continued negotiation with JFS. As a result, the Company reached an agreement with JFS as described in 2 below and entered into the Settlement.

2. Summary of the Settlement

The Company and JFS agreed to terminate the Agreement as of January 25, 2012, to refund JPY 132 million to JFS as a part of indemnification fees that the Company previously received pursuant to the Agreement, to pay the refund in installments, and others.

3. Future projection

As a result of this conclusion of the Settlement, the Company records gains of JPY 162 million on reversal of a part of reserve for the three months ended December 31, 2011.

Special Note Regarding Forward-Looking Statements

These materials contain forward-looking statements about our industry, our business, our plans and objectives, our financial position and our results of operations that are based on our current expectations, assumptions, estimates and projections. These forward-looking statements are subject to various risks and uncertainties. These statements discuss future expectations, identify strategies, discuss market trends, contain projections of results of operations or of financial position, or state other forward-looking information. Known and unknown risks, uncertainties and other factors could cause our actual results to differ materially from and be worse than those contained in or suggested by any forward-looking statement. We cannot promise that our expectations, projections, anticipated results, estimates or other information expressed in or underlying these forward-looking statements will turn out to be correct. Important risks and factors that could cause our actual results to differ materially from these forward-looking statements include without limitation the following: weak domestic economic conditions; misconduct by an employee or director, or negative publicity for our industry
or the Group; regulations concerning the loan business; regulations concerning the overseas trading business; regulations concerning the investment banking; other related regulations; funding and market interest rates; claims for excess interest repayments; outsourcing of operations; investment banking businesses; condition and liquidity in stock markets; economic trends and liquidity in real estate markets; transfer of receivables; capital and business alliance; ability to continue to be listed on the Tokyo Stock Exchange; and transfer of the Group's borrowings by its lender.