P.M. BRIEFING : Japanese Bank Tipped Shareholders to Buy Before Merger Completed
One of two Japanese banks planning a major merger admitted today it urged clients to buy stock in the bank in June before the negotiations had been completed.
The disclosure by Taiyo Kobe Bank has prompted an investigation by the Tokyo Stock Exchange, although officials said they did not suspect insider trading was involved in plans to create the world’s second-largest bank despite large share purchases made by a securities firm affiliated with the bank.
“It was intended to increase the number of stable shareholders of the bank’s stock,” said Fukio Yamamoto, spokesman of Taiyo Kobe Bank, which announced Tuesday it would merge with Mitsui Bank next April. “It had no connection with the merger talks” going on then, Yamamoto said.
Taiyo Kobe stock closed at $11.40 Monday, the day before the merger was announced. Trading in both banks’ stock was suspended Tuesday to give investors time to digest details of the merger. Today, Taiyo Kobe stock closed at $13.50 after the maximum one-day gain of $2.10 allowed under stock exchange rules.
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