Nireco Corp., a high-tech control and measuring device manufacturer, said Wednesday it has scrapped plans to invoke what had been boasted as Japan's first poison pill scheme to ward off hostile takeover bids.

The decision follows a Tokyo High Court ruling earlier in the day rejecting the company's appeal against lower court orders on the issue, it said.

"It is truly regrettable that our argument has not been accepted, but we decided to respond to the ruling in a sincere manner," a Nireco spokesman said.

"We are sorry that we have to cancel our plan to issue warrants for new shares, although we have received applications from a lot of shareholders."

The poison pill plan to defend against a hostile takeover entailed issuing a large amount of new shares to dilute the bidder's stake.

In his ruling, presiding Judge Nobuo Akatsuka said the issuance of free stock subscription warrants to all shareholders in the event of an unwanted takeover bid would send Nireco share prices into a tailspin and wreak havoc on original shareholders.

Nireco was scheduled to issue the warrants Thursday.

The company approved the poison pill scheme at its board of directors meeting in March. But SFP Value Realization Master Fund Ltd., a Cayman Islands-based investment fund and Nireco shareholder, filed a petition in May to bar Nireco from issuing the warrants to all shareholders during a hostile takeover bid.

On June 1, the Tokyo District Court ordered Nireco to give up the plan, ruling in favor of the petition. The district court confirmed the ruling June 9, turning down Nireco's plea to have it revoked.

The investment fund, which said it held a 6.8 percent stake in Nireco as of May 9, has said there is no rationale for invoking the poison pill, as it could drive down the share price, undermining the interests of shareholders.