Aderans seeks Steel refund of ¥59 million in trading gains

Kyodo News

Major wigmaker Aderans Holdings Co. said it is considering demanding that U.S. hedge fund Steel Partners refund ¥59 million it made by trading Aderans shares between December and February.

The Financial Instruments and Exchange Law allows a company to demand that a fund holding a stake of more than 10 percent return gains made from selling and buying the company’s shares within a six-month period, although such trading itself is not illegal.

With its announcement, made Wednesday, Aderans appears to be trying to prevent Steel Partners from gaining greater influence over the firm.

Steel Partners Japan Strategic Fund (Offshore) L.P., the largest shareholder of Aderans, with a stake of 26.7 percent as of June 27, made the profit by selling less than 1 percent of its outstanding shares in December and buying stocks equal to 1.31 percent of the shares in February, according to a filing submitted by the fund to the Finance Ministry’s Kanto Local Finance Bureau.

The bureau turned over a copy of the filing dated Monday to Aderans under Article 165 of the law, which requires that a company be alerted if a fund with a stake of 10 percent or more in it has made a profit after selling and buying its shares within six months.

Steel Partners officials said the short-term deals were not intended to rake in a profit but to adjust its Aderans holdings as part of a review of its portfolio, adding the fund is now preparing the money to be handed over to the wigmaker.