OSAKA – The president of computer firm Media Lynks Corp. was arrested by prosecutors Wednesday on suspicion of insider trading.
Yoshihiko Shindo, 48, and his 45-year-old former wife allegedly avoided capital losses by selling 456 shares of Media Lynks held by his relatives on Osaka’s Hercules market May 27 and May 28, 2003, with the knowledge the company would soon revise downward its earnings projections for the business year to March 31, 2003, the prosecutors said.
After the announcement of the earnings projections in early June, the price of the stock plunged to around 29,500 yen from around 40,000 yen seen at the time the shares were sold.
Without the sale, Shindo would have incurred a capital loss of 4.7 million yen.
In connection with the case, prosecutors and the Securities and Exchange Surveillance Commission raided Shindo’s home and several other places earlier Wednesday.
Shindo has admitted to the allegations and the prosecutors have also grilled his former wife, investigative sources said.
Media Lynks, established in 1993, was listed on the Hercules market in October 2002. Its shares were delisted May 1 this year over a delay in disclosure of important business information.
Shindo had stepped down from his post after being arrested in a separate case in October 2003 for allegedly threatening a business consultant over stock transactions.
The company’s business was disrupted after its dealings with banks were halted in December that year.
Shindo resumed his presidency of the company this spring.
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