Tokyo, JAPAN - March 31, 2005 --
VA Linux Systems Japan K.K. (VA Linux), a leading provider of Linux solutions for the telecommunications and enterprise systems markets, today announced that it confirmed that Sumitomo Corporation (TSE:8053), VA Linux's current largest shareholder, has transferred its all shares of VA Linux to Sumisho Computer Systems Corporation (TSE:9719, SCS), a Sumitomo subsidiary. The transfer has been made on March 31, 2005.

Sumitomo Corporation has been VA Linux's largest shareholder for more than three years. After this transfer, SCS holds approximately 57 percent of the VA Linux shares in terms of voting rights based. Since Sumitomo Corporation owns more than 50% of the SCS shares, thus the largest shareholder of SCS, business relationship between VA Linux and Sumitomo Corporation will not be changed in all respects. Issued number of shares is not changed, therefore the NTT Group still holds the same ratio in shares as before.

"The move Sumitomo Corporation made this time is a very rational one, will maximize the benefit that VA Linux's existing shareholders enjoy" said Tetsuya Ueda, President and CEO of VA Linux in Tokyo. "SCS is the central core of the Sumitomo Group's IT strategy overall. The close-knit relationship between SCS and us will accelerate the adoption of Open Source solutions in the Sumitomo Group even more. The reinforced tie between Sumitomo / VA Linux and its partners including the NTT Group will enable us to pursue its mission as in the past, which means VA Linux does its best to keep being the leading provider of Linux solutions for the telecommunications and enterprise systems markets in Japan."

About VA Linux Systems Japan K.K.

Founded in September 2000, VA Linux Systems Japan K.K. (VA Linux), which has based its operations on the development of Linux and Open Source, has become one of the premier providers of Linux kernel, technological, and software solutions in the Japanese domestic market. From March 2004 onward, VA Linux has been the recipient of funding from NTT Comware and NTT Data. VA Linux is currently at the forefront of implementing Linux solutions for telecommunication and enterprise system markets.
http://www.valinux.co.jp/en/

About Sumisho Computer Systems Corporation (SCS)

Founded in 1969, Sumisho Computer Systems Corporation (TSE:9719, SCS) is one of the leading, all-around system solution provider in Japan. SCS has rich experience in the IT realm overall, including software development in general, IT services in general, telecommunications / network services, hardware support, system integration services, system management services and so forth. The number of employees is 1,762 (as of September 30, 2004) and the total revenue of SCS is 766,75 million yen (Fiscal 2004, consolidated base).
http://www.scs.co.jp/scscom/

About Sumitomo Corporation

Founded in 1919, Sumitomo Corporation (TSE:8053) is one of the largest, major general trading company in Japan. Sumitomo Corporation runs 28 offices in Japan and 127 overseas branches in 71 countries. Sumitomo Corporation not only conducts commodity transactions in all industries utilizing worldwide networks, but also provides related customers with various financing, serves as an organizer and a coordinator for various projects, and invests in businesses from the information industry to the retailing industry. Sumitomo Corporation thus shows great diversification as an Integrated Business Enterprise. The total revenue of Sumitomo Corporation is 9 trillion and 197.8 billion yen, the profit is 666 million yen (Fiscal 2004, consolidated base).
http://www.sumitomocorp.co.jp/english/

Contact

Takako Iizuka
Public Relations
VA Linux Systems Japan K.K.
phone: +81-3-3293-5151
fax: +81-3-3293-5152
Email: mktgvalinux.co.jp