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(Provisional Translation)
July 31, 200
Financial Services Agency
Government of Japan

Administrative Action on Banque AIG Tokyo Branch

1. The Securities and Exchange Surveillance Commission (SESC) conducted an inspection on Banque AIG Tokyo Branch (hereinafter referred as the ''Branch''), and found the following violation of the Securities and Exchange Law. On July 19, 2007, the SESC recommended to the Commissioner of the Financial Services Agency (FSA) to take a disciplinary action on the Branch.

• Trade based upon undisclosed corporate information

(1)	On January 9, 2007, the Branch, on behalf of its overseas affiliated company (hereinafter referred as the ''Holder''), which held convertible bonds issued by Corp. A (hereinafter referred as the ''CBs'', as the ''Bonds'' in respect of the portion thereof corresponding only to the bonds, or, as the ''SARs'' in respect of the portion thereof corresponding only to the stock acquisition rights), exercised an early redemption right attached to the CBs, with the intention of not exercising the SARs thereafter and receiving the entire amount of then outstanding Bonds in cash on a specified date, as the amount equivalent to 90% of the average of the closing prices of Corp. A's common share on five consecutive trading days on the Tokyo Stock Exchange, ending on 5 January 2007, fell below the bottom price of the CB's adjustable conversion price (X yen).
(2)	Notified of the above exercise of the early redemption right, Corp. A made a public announcement titled ''Notice regarding the early redemption of Euro Yen Unsecured, Convertible Bond Type, Corporate Bonds with Stock Acquisition Rights'' (hereinafter referred as the ''Notice'') on 9 January, 2007, which is deemed to have the effect of leading investors to believe that on and after that date the SARs would not be exercised. Following this announcement, in the morning of January 10, the price of Corp. A's common share went up above the closing price (Y yen) of the immediately preceding date and by 9:39 a.m. the price soared to X yen, equal to the then conversion price.
(3)	Recognizing the above price movement, the Branch decided to exercise the SARs and, on and after 10:26 a.m. of January 10, the Branch exercised the SARs on behalf of the Holder. The Branch also decided to sell the shares thus acquired, with the intention of making profits by selling the shares at the price above the then conversion price, and the Branch's trader placed sell orders with another securities company and, by so doing, sold the shares at the market at its discretion, which the Holder had provided with the Branch in accordance with the discretionary-account trading contract previously entered into between them, although the fact that the Holder exercised the SARs on and after the announcement of the Notice and that Corp. A consequently issued new shares was not disclosed.
(4)	No later than 10:47 a.m. of January 11, the trader reported to the Japanese representative of the Branch the above exercise of the SARs and the sale of the shares; on that occasion, however, the representative expressed no objections to the trader's activities and the trader continued the exercise of the SARs and the sale of the shares until January 24.
(5)	On January 17, the Branch filed an amended report relating to the large shareholding report and disclosed ''the fact that the Holder exercised the SARs and acquired 1,689,187 shares of Corp. A on January 10''in it.

The sales of Corp. A's shares by the Branch (limited only to the sales from 10:26 a.m. of January 10 through 3:00 p.m. of January 15, in which period the exercise of the SARs as well as the issuance of Corp. A's shares was not disclosed) constitute breach of Article 4(x) of Ordinance of Cabinet Office concerning Regulation, etc. of Conducts of Securities Company, which prohibits ''trade based upon undisclosed corporate information (including trade done in accordance with a discretionary-account trading contract) ''.

2. Administrative Action on the Branch

On the basis of this violation above, the FSA today issued the following administrative action to the Branch based on Article 24(1) of the Law on Foreign Securities Firms.

• Business Improvement Order

1. To verify its internal control system and to clarify locus of responsibility, based on this administrative action.
2. To take and implement preventive measures against recurrence of the above-mentioned violation, based on the verification.
3. To enhance compliance by all executives and employees, and to conduct necessary trainings and other measures for securing proper business management.
4. To Submit a report to the FSA on the implementation of the above measures by August 31, 2007.