Lack of accountability at Seibu

西武鉄道の説明責任

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 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 undermines shareholder and investor interests.

What's more, Seibu could face criminal charges of insider trading — a stock transaction made with the help of prior confidential information. The company is suspected of having sold shares held by Kokudo and others to corporate clients without telling buyers that the ratio exceeded the 80 percent listing standard. Seibu stock prices dropped after the deals became public. Such trading could constitute a violation of the Securities and Exchange Law.

Mr. Tsutsumi had been widely regarded as one of Japan's representative corporate leaders. He has built a major conglomerate comprising a wide range of operations, including transportation, real estate, tourism and leisure. The scandal, however, has revealed the flip side of "one-man management": a lack of respect for fairness and transparency — guiding principles of the free-market economy.

Mr. Tsutsumi admitted his responsibility at a news conference, saying his (aristocratic) presence might well have created a "stuffy" atmosphere in the Seibu group. It seems unlikely, though, that such an apology is enough to appease angry investors and clients whose stakes in the company plummeted in value after the scandal broke.

Both cases of false filing and insider trading are under investigation by various authorities, notably the TSE, the Land, Infrastructure and Transport Ministry, and the Kanto Regional Finance Bureau of the Finance Ministry. They should leave no stone unturned and, if necessary, consider filing criminal charges.

Allegedly Seibu underreported its shareholding ratio over an extended period. It is alleged that the company transferred ownership of some shares held by Kokudo and other affiliates to individual shareholders, and that Kokudo and others received dividends payable to those shareholders.

The stock sales to clients were allegedly made months before the transactions were made public, although Mr. Tsutsumi said that he learned of the deals barely a month before. The legal ban on insider trading could apply if the trading was aimed at reducing the share-holding ratio rather than promoting mutual stock ownership (as was reportedly explained to the purchasers).

Legal experts question whether stock sales for this purpose represent a transaction aimed at "profiteering," a violation of the securities law. Whatever the final answer, the fact remains that buyers and shareholders have suffered heavy losses because large numbers of shares were sold.

The Seibu Group has expanded around family ties while most other privately owned groups have developed into more open organizations oriented toward general investors and shareholders. Given the public's particular interest in it, Seibu Railway should have followed the same path. More than 30 years ago, large blocks of Seibu stock were purchased by a number of well-known speculators, including Kenji Osano and Yoshio Kodama, both of whom were implicated in the Lockheed payoff scandal. They made enormous profits by selling the stock back to Seibu at higher prices. The company appears to have become overly defensive ever since. Perhaps that's why it has internalized its stock and minimized the number of shares available for public trading.

Whatever the reasons, Seibu has deceived investors. Mr. Tsutsumi has a duty to explain what went wrong and why — all the more because of the extensive influence he has wielded in a broad range of fields, including politics and sports.

The Japan Times Weekly
Nov. 6, 2004
(C) All rights reserved

      西武グループの総帥、堤義明氏は西武鉄道会長などグループのすべての役職を辞任した。

      西武鉄道は有価証券報告書で、親会社であるコクドを含むグループ企業の持株の割合を過少申告していた。東証の基準によれば、少数の株主が80%以上の株式を保有する会社は上場廃止の対象になる。

      さらに西武鉄道はインサイダー取引について刑事訴追を受ける可能性がある。西武鉄道はコクドなどの持株を取引企業に売却したが、その際に同社が上場基準に抵触していた事実を説明していなかった。西武鉄道株は、問題の株式売却が明るみに出てから暴落した。このような取引は証券取引法違反になる可能性がある。

      堤氏は交通、不動産、観光、レジャー産業などの複合企業を作り、名経営者と評されたが、今回の不祥事は「ワンマン経営」の問題を浮き彫りにした。

      西武鉄道は、コクドなど関連企業の保有株を個人株主名義に書き換え、関連企業は個人株主に支払われるべき配当を受け取っていたという。

      取引企業への株式売却は、明るみに出た数ヵ月前に行われたというが、堤氏は売却について知ったのは1ヵ月前だったと主張している。

      西武グループは同族経営で発展してきたが、他企業グループと同様により開かれた組織にすべきだった。76年のロッキード事件にも関与した小佐野賢治、児玉誉士夫が30数年前に西武に高値で売却した大量の同社株から巨額の不当利得をあげたが、この事件後、西武は市場に流通可能な株式を制限してきた。

      理由はともかく、西武は投資家を欺いた。政界、スポーツ界などで大きな影響力を揮ってきた堤氏は、不祥事について十分な説明をする義務がある。