Seibu Holdings planning TSE return

Kyodo

Seibu Holdings Inc. is preparing to relist shares on the Tokyo Stock Exchange this year, seven years after a financial scandal triggered the delisting of Seibu Railway Co., sources said.

The plan apparently indicates the holding company of Seibu Railway and Prince Hotels Inc. is ready to conduct business in a transparent manner and comply with the law, the sources said.

In October 2004, Seibu Railway admitted that falsified financial statements had underrated Kokudo Corp.’s equity stake in the railway group. Kokudo was the privately held company that effectively controlled the group at the time and was headed by Yoshiaki Tsutsumi.

The falsification allowed the railroad to circumvent a TSE delisting rule that kicks in when the combined stake of its top 10 shareholders exceeds 80 percent for more than a year. After concluding the falsification had been going on for more than 40 years, the TSE delisted Seibu Railway in December 2004.

To address its financial difficulties in the wake of the delisting, the Seibu group accepted a capital contribution from U.S. investment firm Cerberus Group and hired Mizuho Corporate Bank Vice President Takashi Goto to be its president.

Under Goto’s leadership, the Seibu group sold off its golf courses and other assets so it could concentrate on its core railroad and hotel businesses.

It then established Seibu Holdings in February 2006 to enhance its corporate governance, allowing it to break away from the founding family’s control, which had been exercised through Kokudo.

Given the falsification scandal, the TSE is expected to give Seibu Holdings’ application to go public more scrutiny than usual, securities industry officials said.