A total of 211 individuals and two companies holding shares in Seibu Railway Co. jointly sought about 350 million yen in damages in a class-action suit filed Tuesday against the scandal-tainted railway, its parent Kokudo Corp. and former top executives, including ex-Seibu Railway and Kokudo boss Yoshiaki Tsutsumi.
The plaintiffs had purchased Seibu Railway shares before the company revealed last October its longtime practice of falsifying its financial statements. Lawyers said the suit, filed with the Tokyo District Court, is the first against an existing company over declines in its stock prices.
Lawyers for the plaintiffs also filed a criminal complaint Tuesday with the Tokyo District Public Prosecutor's Office against the railway, Tsutsumi, and former Seibu Railway Presidents Terumasa Koyanagi and Hiroyuki Toda on suspicion of falsifying financial statements in violation of the Securities and Exchange Law.
In the damages suit, the plaintiffs said Tsutsumi and other former Seibu Railway executives "misled shareholders by concealing a fact that would fall under the delisting criteria" of the Tokyo Stock Exchange. "They should be held responsible for committing an illegal act of falsification," the plaintiffs said.
The maximum amount sought by each shareholder is 20 million yen, the suit says.
Seibu Railway's stock traded at 1,081 yen just before the announcement on Oct. 13. It plunged to 268 yen on Nov. 16 when the Tokyo Stock Exchange decided to delist the company for falsification of financial statements. The stock was delisted Dec. 17.
Of the 211 individual shareholders, those who still hold Seibu Railway shares demanded the company pay the difference between the value of their shareholdings before and after its announcement last October.
Those who sold the shares after the Oct. 13 revelation sought compensation for the difference between 1,081 yen and the prices at which they sold after the announcement.