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Ichigo Begins Proxy Solicitation of Steel Maker Tokyo Kohtetsu Shareholders, Seeks Votes against Mandatory Share Exchange that has Poor Terms for Shareholders

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[Tokyo, February 2, 2007] Ichigo Asset Management, Ltd. (“Ichigo”) began proxy solicitations today of shareholders of steel maker Tokyo Kohtetsu Co., Ltd. (JASDAQ 5448) (“Tokyo Kohtetsu”) on behalf of Ichigo Japan Fund A (“Ichigo Fund”) , a major shareholder of Tokyo Kohtetsu. Ichigo intends to win support from other Tokyo Kohtetsu shareholders to defeat a proposed mandatory share exchange of Tokyo Kohtetsu shares into shares of Osaka Steel Co., Ltd. (Tokyo, Osaka 5449) (“Osaka Steel”) at a Tokyo Kohtetsu extraordinary shareholder meeting scheduled for February 22, 2007.

On October 26, 2006, Tokyo Kohtetsu and Osaka Steel announced an agreement whereby Tokyo Kohtetsu will be delisted and become a wholly-owned subsidiary of Osaka Steel. The agreement proposes that a shareholder of Tokyo Kohtetsu will be allotted 0.228 shares of Osaka Steel for each one share of Tokyo Kohtetsu.

As outlined in an announcement on January 15, 2007, Ichigo has high regard for Tokyo Kohtetsu’s business success, profitability, and significant financial strength. Ichigo also respects management’s decision to become a wholly owned subsidiary of Osaka Steel, recognizing that the business integration is projected to generate extremely large earnings synergies, equivalent to about 50 percent of Tokyo Kohtetsu’s existing earnings.

However, Ichigo believes that the proposed share exchange fails to fully reflect the value of Tokyo Kohtetsu. According to Ichigo’s calculation, Osaka Steel is offering Tokyo Kohtetsu’s shareholders a premium of 0.3 percent relative to the one-month average share price prior to the announcement date or a 5.8 percent premium relative to the announcement date closing price. Given that Tokyo Kohtetsu generates among the highest operating margins and return on equity in the Japanese steel industry, Ichigo believes that there is significant upside potential for Tokyo Kohtetsu’s share price well beyond the proposed share exchange offer. Ichigo also believes that the proposed exchange unreasonably undervalues Tokyo Kohtetsu for four reasons:

1) The improvement of Tokyo Kohtetsu’s business performance not factored in
by the proposed share exchange -- Tokyo Kohtetsu did not release a 32% upward revision to its fiscal 2006 half-year earnings guidance until after market-close on the day of the share exchange announcement. This upward revision could very well have had a positive impact on Tokyo Kohtetsu’s share price, and should have been reflected in the share price for the share exchange ratio calculation;
2) The value of Osaka Steel’s full management rights over Tokyo Kohtetsu (the so-called “control premium”);
3) The superior earnings yield of Tokyo Kohtetsu relative to Osaka Steel -- Tokyo Kohtetsu’s forecast fiscal 2006 earnings yield of 16% is far higher than that of Osaka Steel’s 10%, resulting in substantial earnings accretion to Osaka Steel;
4) The massive earnings synergies from combining Tokyo Kohtetsu’s and Osaka Steel’s businesses.

Furthermore, according to Tokyo Kohtetsu’s and Osaka Steel’s October 26, 2006 announcement, Tokyo Kohtetsu hired Mitsubishi UFJ Securities Co. Ltd. for the purpose of providing a neutral, third-party valuation (a so-called “fairness opinion”) on the price being offered by Osaka Steel. However, the announcement also noted that Osaka Steel’s main bank is The Bank of Tokyo-Mitsubishi UFJ, Ltd., the central bank of the financial group to which Mitsubishi UFJ Securities Co. Ltd. belongs. Ichigo believes that a third-party valuation to assess the offer from Osaka Steel should have come from a group with no connection to Osaka Steel.

Ichigo has had discussions with Tokyo Kohtetsu and Osaka Steel management to seek an improvement in the share exchange terms. While Ichigo continues to hope that such an improvement will occur, it received a clear response on February 1, 2006 from Tokyo Kohtetsu that there would be no change to the share exchange terms. As a result, working on behalf of Ichigo Fund, Ichigo has begun a proxy solicitation, seeking broad support from all Tokyo Kohtetsu shareholders.

At Tokyo Kohtetsu’s extraordinary shareholder meeting, approval of this share exchange requires a 2/3 majority. Ichigo believes there is sufficient opportunity to win support from other shareholders, that when added to Ichigo Fund’s approximately 10% of voting shares, independent shareholders can reach the required 1/3 of votes to defeat the current share exchange proposal.

Scott Callon, Partner and Chief Executive Officer of Ichigo, comments: “Ichigo supports Tokyo Kohtetsu as a highly profitable company with a bright future. As a Tokyo Kohtetsu shareholder, Ichigo Fund is sorry to see Tokyo Kohtetsu be delisted as part of this acquisition by Osaka Steel, but we also recognize the massive earnings synergies created by bringing the two companies together. Because of this, Ichigo thinks that the shareholders of Tokyo Kohtetsu, including over 1,000 individual investors, deserve a fair price which reflects the true value of Tokyo Kohtetsu. Ichigo believes that the consolidation of the Japanese steel industry can occur while still protecting shareholders, and we hope that the shareholders of Tokyo Kohtetsu will respond positively to our proxy solicitation.”

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For further information, please contact:
Gavin Anderson & Company: Hayden/Hattori/Higashi +81-3-5404-0640

Notes to editors:

Ichigo is an independent asset manager specializing in Japanese equities. Ichigo believes good corporate governance lies at the heart of strong company performance, and is seeking a new model for Japanese corporate governance that includes active, committed, and responsible shareholders. Ichigo’s Singapore-based fund manager, Ichigo Asset Management International, Pte. Ltd., undertakes investments for a Cayman Islands-domiciled unit trust, Ichigo Japan Fund A, and its Japan-based investment advisor, Ichigo Asset Management, Ltd., provides investment advice.

For further information, please visit the website: http://www.ichigoasset.com/