To the dismay of many people, the stock scandal involving Seibu Railway Co. has exposed a cloistered corporate culture. Seibu -- which went public more than half a century ago -- allegedly filed a false securities report to the Tokyo Stock Exchange (TSE). It is also suspected of illegal insider trading.
Mr. Yoshiaki Tsutsumi, the de facto owner of the Seibu Group, has resigned as chairman of Seibu Railway, and has quit all his other positions in the group.
In the report, Seibu allegedly understated the combined stake held by its parent company, Kokudo Corp. and other members of the group. According to TSE rules, a company in which a handful of major shareholders hold more than 80 percent of the stock may be delisted. That's because excessive concentration of stock ownership distorts public stock trading and thus undermines shareholder and investor interests.