Toyota denies insider trading charge
Toyota denies insider trading charge
TOKYO (AFP): Japan's Toyota Motor Corp. on Monday
categorically denied it was guilty of insider trading over its
record-breaking purchase announced last month of US$2.2 billion
worth of its own shares.
The share buyback plan, the biggest in corporate Japanese
history, had prompted a Tokyo Stock Exchange investigation after
it coincided with a flood of buy orders for Toyota stock, the
Mainichi Shimbun said at the weekend.
But the allegations were baseless, said Tetsuo Kitagawa, head
of international communications at Japan's biggest car company.
"I understand there is no basis in fact that company
executives, employees or people (related to the company)
conducted insider trading," he told AFP.
"The company has not started any in-house investigation and
there is no basis to the report that the Tokyo Stock Exchange has
contacted the company," Kitagawa said.
According to Saturday's newspaper report, the stock exchange
suspected collusion surrounding Toyota's announcement on Jan. 16
that it was buying back 75 million shares worth some 250 billion
yen ($2.2 billion).
A slew of buy orders for Toyota shares was placed soon after
the stock exchange opened at 9:00 am, the daily said. Four
million Toyota shares changed hands between 9:20 am and 9:40 am,
more than all of the previous day's volume.
Toyota's buyback plan appeared in the media at around 2:00 pm
and the company officially announced the plan just after 3:00 pm,
when trading closes on the stock exchange.
The share price hit a high of 4,020 yen before closing at
3,970 yen, up 450 yen or 12.8 percent. The stock closed Monday
down 110 yen or 2.8 percent at 3,830 from Friday's close.
Toyota said the buyback, due to be completed by the end of the
fiscal year on March 31, was designed to prop up its share price
as companies dump cross-shareholdings ahead of the fiscal year-
end.
Noriaki Ushijima, an official in the investigation office of
the Tokyo Stocks Exchange, said: "We refrain from making any
comment on individual cases."
But it was routine for market authorities to probe major
announcements such as Toyota's to see if there was any undue
movement in the share price, he said.
"Generally speaking, when companies announce earnings reports,
restructurings and stock buybacks, we check to see if company
executives, employees, trading partners, banks or securities
companies used that information to trade shares.