Police arrested five people Tuesday on suspicion of arranging fake capital increases for Tokyo-based bicycle manufacturer Maruishi Cycle Industries Ltd.

The arrests, including that of a former president of the firm, came just before the listing of Maruishi Cycle’s holding company on the Tokyo bourse.

Yoshio Yagi, 52, who was fired as president on May 25 after being questioned by police, was arrested by the Tokyo Metropolitan Police Department in the evening.

Two other Maruishi employees are also among the suspects, according to police.

After police questioning, Yagi filed a criminal complaint with them, naming himself as a suspect over alleged aggravated breach of trust. He then broke off all contact with the firm.

When a medical company in Gunma Prefecture bought 4.5 million new shares in Maruishi upon a capital increase in mid-March last year, Yagi provided the firm with a loan of some 274 million yen that roughly matched the payment for the new shares, according to sources close to the investigation.

Upon another capital increase worth 350 million yen in June last year, a real estate consulting company received a loan from Maruishi and acquired new shares, they said.

Maruishi’s new president, Takashi Nagahori, said earlier that the company had not identified any wrongdoing with regard to the capital increases, but would conduct its own investigation.