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Kokudo faked names of all shareholdings when Seibu debuted in 1949.

TOKYO, March 15 Kyodo

Kokudo Corp., which was formerly headed by scandal-tainted business tycoon Yoshiaki Tsutsumi, falsified the ownership of all its shareholdings in Seibu Railway Co. when the railway operator went public in 1949 by registering them under the names of individuals, sources familiar with the issue said Monday.

Kokudo completed correcting the practice at the end of last year following its revelation last October, they said.

Kokudo had about 2.06 million shares in Seibu Railway, or about 90 percent of all the shares issued when the railway operator listed on the Tokyo Stock Exchange in 1949, but it falsified the ownership and registered its shareholdings under the names of individuals, the sources said.

Kokudo, a privately held firm that effectively controls Seibu Railway and its group firms, such as leisure facilities and a hotel chain, began changing the share ownership to Kokudo since around 1965 because it had been uncomfortable with the practice and because Seibu Railway had an unusually high number of individual shareholders, peaking at about 2,000 in 1964, they said.

The practice of falsifying ownership of the shareholdings eventually resulted in the arrest of Tsutsumi, 70, on March 3 over his alleged involvement in falsifying financial statements and in insider trading.

To falsify ownership, Kokudo used the names of Seibu Railway employees and their family members without their permission, the sources said.

Some of the shares were also registered under the names of relatives of Tsutsumi's late father Yasujiro and the father's aides, they said.

As a result, most of the 10 largest shareholders in 1955 were Yasujiro's aides.

In 1957, Kokudo registered its name as a shareholder of Seibu Railway for the first time, but its registered ownership accounted for only about 9 percent of Kokudo's actual shareholdings in the railway operator.

The ratio of Kokudo's registered ownership against its actual shareholdings has exceeded 50 percent since 1985.

As of March last year, Kokudo held about 280.93 million of Seibu Railways' 433.3 million outstanding shares.

Of the 280.93 million shares, about 33 percent were registered under Kokudo's name and the rest were registered under individuals' names with the number of individuals registered as shareholders totaling about 1,200.
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Publication:Japan Weekly Monitor
Date:Mar 21, 2005
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