Prosecutors likely to grill Tsutsumi

Prosecutors apparently launched a criminal case Tuesday against former Kokudo Corp. Chairman Yoshiaki Tsutsumi over false statements he allegedly made about shareholdings in Seibu Railway Co., sources said.

The Tokyo District Public Prosecutor's Office alleged that Tsutsumi, 70, violated the Securities and Exchange Law by instructing his aides to underreport equity stakes in Seibu Railway held by major shareholders, including Kokudo, the privately held firm that effectively controls the Seibu Railway group.

The prosecutors are believed to have concluded that some of the railway's shareholdings held in the names of individuals were effectively owned by Kokudo, and that the false reports were intended to circumvent a Tokyo Stock Exchange listing requirement that bans major shareholders from owning more than 80 percent of a firm.

The Securities and Exchange Surveillance Commission is also reportedly considering filing a criminal complaint with prosecutors over Tsutsumi's false statements about the railway's shares.