METI bigwig nabbed in insider trading via wife’s name

Kyodo

Prosecutors arrested a senior official at the trade ministry Thursday over insider trading in a 2009 state-led bailout for chip-maker Elpida Memory Inc.

Masaaki Kimura, 53, is suspected of repeatedly buying shares in Elpida Memory under his wife’s name from February to May 2009.

If found guilty, he could face five years in prison or a fine of up to ¥5 million.

The Tokyo District Public Prosecutor’s Office arrested him on suspicion of violating the Financial Instruments and Exchange Law, which prohibits shady stock transactions.

Kimura has been assigned to the trade minister’s secretariat since June, traditionally a dumping ground for scandal-hit officials.

Elpida Memory had run into difficulties after demand for digital products declined, and in April 2009 announced that it had entered into a technological partnership with Taiwan Memory Co., a company set up by Taipei to aid its domestic semiconductor makers.

The government decided to bail out Elpida Memory in June 2009, and the state-run Development Bank of Japan subsequently invested about ¥30 billion in the company to keep it afloat.

During that period, Kimura was directly involved in the state-led bailout as director general of the Ministry of Economy, Trade and Industry’s Commerce and Information Policy Bureau.

He has reportedly told investigators that as his stock trading took place after Elpida Memory’s capital reinforcement plan was reported in the media, he did not violate any laws.

During questioning by investigators from the prosecutor’s office and the Securities and Exchange Surveillance Commission, Kimura claimed his wife had instructed him to buy the shares, investigative sources said.

Kimura is also suspected of insider trading in connection with stock transactions in both NEC Electronics Corp. and Renesas Technology Corp. in April 2009, before details of their planned merger had been publicly released.

He is suspected of selling his stock holdings in both firms after the merger was officially announced, reaping profits of about ¥2 million, the sources said.

Kimura set up some of the stock transactions using a ministry-issued mobile phone, and some of the trading took place while he was on duty at METI, the sources also said.

Kimura previously served as deputy head of the ministry’s Agency for Natural Resources and Energy.