The president of Daiei Inc. purchased shares in a group company last year but subsequently sold them after talking to his legal adviser, who said there may be an appearance of insider trading, officials of the major supermarket chain operator said Tuesday.
Tadasu Toba donated his 15.9 million yen in profit from the share sale to three organizations, including the Japan Committee for UNICEF, after the adviser pointed out that the purchase might be regarded as a case of insider trading, the officials said.
Toba bought 100,000 shares in Daiei OMC Inc. for 20.1 million yen in May 1999. At that time, Daiei OMC was considering writing off problem loans to an affiliated nonbank financial institution. It announced the write-off plan in August, which sent Daiei OMC stock rising.
Following the purchase, Toba reported the deal to Daiei's financial affairs section, as required by in-house rules, and consulted with a company lawyer.
He sold the 100,000 shares for 36 million yen between in December and January.
Toba "bought the shares at his own expense," but only with the intention to help "the management of the Daiei group in the long run," a Daiei official said. The purchase was not made with the intention of selling after the price had risen, he said.
The Securities and Exchange Law prohibits trading in shares in a company based on important information available to insiders before its disclosure to the public.