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SBI Holdings Statement of Clarification


    SBI Holdings, Inc. (SBI) submits the following clarifications
    regarding certain reports in the media issued today on various news
    wires.

    #1: INACCURATE MEDIA REPORTS CONCERNING SBI's CORPORATE TAX
    PAYMENTS

    On May 8th of this year, SBI announced through its corporate
    website that after undergoing an examination by the tax authorities
    during the March 2006 period, in line with directions from the
    authorities, SBI, despite differences in opinion with the tax
    authorities, filed an amended return and paid the taxes due. And since
    this time no additional taxes have been levied at SBI by the tax
    authorities. At no time has SBI ever been accused by the tax
    authorities of "hiding income."

    With regards to reports concerning stock transactions between an
    SBI fund and an SBI subsidiary, in reality the party involved in the
    stock transaction was not an SBI subsidiary, but an unrelated real
    estate company. Further, the stock in question, originally held by a
    fund managed by SBI, involved a small company which had, since the
    fund's initial investment, grown significantly due in part to its
    merger with another company. Therefore, as a matter of course, in the
    time between the SBI fund's first and second investment, not only did
    the value of the small company grow, but there was a change in this
    company's stock price as well.

    The SBI fund and the real estate company each obtained their own
    objective stock price evaluations conducted by independent third party
    appraisers, after which the parties then conducted the stock
    transaction. Therefore, as the determination of the stock price was
    fair and appropriate, SBI does not believe the transaction can be
    construed to be a donation.

    #2: INACCURATE REPORTS CONCERNING STOCK TRANSACTIONS

    Further, in the reports issued today by certain news media
    organizations alleging SBI's hiding of taxable income, those reports
    that suggest SBI's stock transactions with a real estate subsidiary
    were designed to create profit were totally wrong. The real estate
    company involved was not an SBI subsidiary company, and SBI has also
    never received any directives from the tax authorities concerning
    these stock transactions. Therefore any suggestion that SBI engaged in
    stock transactions "to support its subsidiary company" or to "make
    donations to its subsidiary company" are inaccurate.

    # 3. INCORRECT REPORT BY TOKYO SHIMBUN DATED OCTOBER 27, 2006

    The Tokyo Shimbun newspaper implied that SBI Holdings, Inc
    ("SBI"), using a group investment fund, intended to provide funds to a
    Liberal Democratic Party (LDP) politician by purchasing shares in a
    politician's Internet business company. This allegation is completely
    false.

    The company referred to in the news release (the "Company") was
    established in April 2000 with the goal of operating businesses that
    utilize computer network and internet services. The Company, involved
    in the so-called "Millennium Project" initiated by the Japan Chamber
    of Commerce and Industry (JCCI), was to pursue its business goals
    through the application of U.S. business methodologies with the aid
    and support of the JCCI.

    In September 2000, a fund managed by SBI acquired a percentage of
    shares in the Company due to the Company's allocation of shares to the
    third party. At the same time, the fund entered into an option
    contract with the Company to purchase additional Company shares from
    its president in December 2000. Consequently, contrary to what the
    newspaper reported in its article, the fund's investment into the
    Company has no connection whatsoever with the President's subsequent
    candidacy for the Japan House of Councilors. Indeed, as of September
    2000, neither the fund nor SBI was aware of the Company president's
    intention to run for a seat in the House of Councilors the following
    year.

    SBI has never made donations to any political parties and/or
    politicians. Considering the nature of SBI's businesses, SBI does not
    see any necessity for political donations and has no plans to make
    such donations now or in the future.

    Some of today's news reports may detrimentally damage SBI's
    reputation. SBI plans to immediately file formal protests with the
    news organizations responsible for the news reports. SBI will also
    begin reviewing its legal options and potential remedies.