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Kokudo Corp. has nullified Seibu Railway Co. stock transfer deals with Maeda Corp. and returned almost 1 billion yen to the construction company in light of the Seibu Railway false financial report scandal, Maeda said Friday.

Maeda said in a statement that Kokudo returned 999.12 million yen Thursday to the company by voiding the contractor’s purchase contract for 823,000 Seibu Railway shares from Kokudo.

Maeda bought the shares on Sept. 13 for 1,214 yen per share, according to the company.

The construction firm is one of the 70 or so companies that bought Seibu Railway shares from Kokudo without knowing the railway had made false reports on shareholder ratio figures.

Kokudo, the core company of the Seibu Railway group and operator of the Prince Hotels chain and skiing and golf resorts, sold some 65 billion yen worth of Seibu Railway shares to the 70 companies in August and September, before the scandal broke.

After the revelation, the price of Seibu Railway shares plunged, prompting many buyers to demand their money back.

Core firm to be split

A Seibu Railway group reform panel plans to split the core firm of the scandal-tainted group into two firms, the panel’s chairman said Friday.

After Kokudo Corp. is split, one of the firms will merge with Seibu Railway Co. and the other will manage the assets, sources said.

The plan is designed to dilute former Kokudo Chairman Yoshiaki Tsutsumi’s influence over the group and allow Seibu Railway to replace Kokudo as its core.

Mizuho Corporate Bank and other banks will be asked to invest more than 100 billion yen in the merged company.

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