Seibu Railway Co. said Friday one of its managing directors has resigned to take responsibility for his involvement in parent Kokudo Corp.’s dubious sales of shares in the railway operator.

Seibu Railway said in a statement that earlier in the day it had accepted an offer by Toshiyuki Shirayanagi to step down.

It was “quite inappropriate” for a company executive to be involved in the transactions, Seibu Railway said.

It was not immediately clear what role Shirayanagi had played in the share deal, which has prompted an investigation of Kokudo by the Securities and Exchange Surveillance Commission. Kokudo is an unlisted firm that runs the Prince Hotels chain and sports facilities.

The investigations center on whether Kokudo and Seibu Railway falsified information in their financial statements and whether there was insider trading in connection with the sales of shares in the railroad operator.

At least 30 companies bought Seibu shares at the request of Kokudo before the announcement Oct. 13 that the company had reported its shareholdings in Seibu Railway as being smaller than the true amount.

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