SAPPORO – Prosecutors arrested the president of architectural firm Exas Inc. on Thursday on suspicion of insider trading connected to the management merger of three do-it-yourself store chains into DCM Japan Holdings Co. last June.
Takeyuki Uchida, 52, president of the Tokyo-based company, allegedly acquired inside information from Sapporo-based Homac Corp., one of the three operators, before the plan was announced. The other two operators are Kahma Co. in Kariya, Aichi Prefecture, and Daiki Co. in Matsuyama, Ehime Prefecture.
Uchida, who faces charges of violating the Securities and Exchange Law, has admitted to investigators that he engaged in the stock trading but told them he did not know the trading was illegal, according to the Sapporo District Public Prosecutor’s Office.
On the same day, the prosecutors and the Securities and Exchange Surveillance Commission raided several locations, including DCM Japan’s headquarters in Tokyo, the home of DCM Japan President Katsutoshi Maeda, as well as Homac’s headquarters, to uncover how the information was leaked.
Investigators believe Uchida obtained the information in May, buying 4,000 Homac shares in that month for 4.03 million yen and 17,000 Kahma shares in June for around 28.38 million yen.
Given that the merger plan was announced on July 11, 2005, the prosecutors believe Uchida sold the shares after their prices rose on the announcement. They are continuing to probe for evidence of such transactions.
The day after the announcement, Homac shares climbed to 1,250 yen on the Tokyo Stock Exchange, up from the previous day’s level of 1,100 yen, marking the highest level for the year, while shares in Kahma rose 22 yen to 1,740 yen, also the highest for the year. Homac shares rose further, hitting 2,396 yen in January 2006.
Both companies were delisted last August due to the merger.
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